The balance sheets at the end of each of the first two years of operations indicate the following: 
If net income is $115,000 and interest expense is $30,000 for 2012, and the market price is $30, What is the price-earnings ratio on common stock for 2012 (round to one decimal point) ?
Definitions:
Premium Price
A price that is higher than the regular or standard price, often associated with goods of higher quality or insurance costs.
Forward Rate
is a financial term referring to a predetermined interest rate or currency exchange rate agreed upon for a transaction that will occur at a future date.
Discount
A reduction from the usual cost of something or the process of determining the present value of future cash flows.
Political Risk
In international business, the chance that the value of a firm’s investment in a foreign country will be reduced by political actions of either the foreign government or terrorists.
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