McDaniel Corporation Had Net Income for 2016 of $72,000

question 23

Multiple Choice

McDaniel Corporation had net income for 2016 of $72,000.McDaniel had 6,000 shares of common stock outstanding at the beginning of the year and 26,000 shares of common stock outstanding at the end of the year.There were 8,000 shares of preferred stock outstanding all year.During 2016,McDaniel declared and paid preferred dividends of $19,000.On December 31,2106,the market price of McDaniel's common stock is $48 per share and the market price of its preferred stock is $69 per share.What is McDaniel's price/earnings ratio? (Round any intermediate calculations and your final answer to the nearest cent. )

• A)14.50
• B)20.85
• C)17.33
• D)15.33

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Definitions:

Firms

Business organizations, such as corporations, partnerships, or sole proprietorships, that are engaged in commercial, industrial, or professional activities.

Market

A platform or area where buyers and sellers come together to exchange goods, services, or information.

Firm Revenue

The total income received by a company from its sales of goods or services before any expenses are subtracted.

Economy

The system of production, distribution, and consumption of goods and services within a geographical region.