Leonhardt Corporation's Net Income Last Year Was $3,800,000

question 8

Multiple Choice

Leonhardt Corporation's net income last year was $3,800,000. The dividend on common stock was $2.00 per share and the dividend on preferred stock was $1.80 per share. The market price of common stock at the end of the year was $53.40 per share. Throughout the year, 500,000 shares of common stock and 100,000 shares of preferred stock were outstanding. The price-earnings ratio is closest to:

• A) 9.54
• B) 7.03
• C) 7.38
• D) 10.19

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