The balance sheets at the end of each of the first two years of operations indicate the following: Kellman Company Year 2 Year 1 Total current assets $603,286 $590,997 Total investments 68,917 40,047 Total property, plant, and equipment 871,459 632,854 Total current liabilities 109,952 82,162 Total long-term liabilities 324,739 241,722 Preferred 9% stock, $100 par 91,682 91,682 Common stock, $10 par 528,964 528,964 Paid-in capital in excess of par-common stock 67,031 67,031 Retained earnings 421,294 252,337 Using the balance sheets for Kellman Company, if net income is $112,358 and interest expense is $40,439 for Year 2, and the market price of common shares is $40, what is the price-earnings ratio on common stock for Year 2 (rounded to two decimal places)?
The balance sheets at the end of each of the first two years of operations indicate the following: Kellman Company Year 2 Year 1 Total current assets $603,286 $590,997 Total investments 68,917 40,047 Total property, plant, and equipment 871,459 632,854 Total current liabilities 109,952 82,162 Total long-term liabilities 324,739 241,722 Preferred 9% stock, $100 par 91,682 91,682 Common stock, $10 par 528,964 528,964 Paid-in capital in excess of par-common stock 67,031 67,031 Retained earnings 421,294 252,337 Using the balance sheets for Kellman Company, if net income is $112,358 and interest expense is $40,439 for Year 2, and the market price of common shares is $40, what is the price-earnings ratio on common stock for Year 2 (rounded to two decimal places)?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The
| Kellman Company | ||
| Year 2 | Year 1 | |
| Total current assets | $603,286 | $590,997 |
| Total investments | 68,917 | 40,047 |
| Total property, plant, and equipment | 871,459 | 632,854 |
| Total current liabilities | 109,952 | 82,162 |
| Total long-term liabilities | 324,739 | 241,722 |
| 91,682 | 91,682 | |
| Common stock, $10 par | 528,964 | 528,964 |
| Paid-in capital in excess of par-common stock | 67,031 | 67,031 |
| 421,294 | 252,337 |
Using the balance sheets for Kellman Company, if net income is $112,358 and interest expense is $40,439 for Year 2, and the market price of common shares is $40, what is the price-earnings ratio on common stock for Year 2 (rounded to two decimal places)?
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