Chapter 16, Problem 2F15

To determine

Concept Introduction:

Earnings per share:

The Earnings per share is the amount of net income earned by each common share outstanding. The Earnings per share is calculated with help of following formula:

  $\text{Earnings per share=}\frac{\text{Net Income - Preferred Dividend}}{\text{Number of Common Shares Outstanding}}$

Price Earnings Ratio:

The price earnings ratio shows the relationship between price of the share and earnings per share. It is calculated with the help of following formula:

  $\text{Price Earnings Ratio=}\frac{\text{Market price per share}}{\text{Earnings per share}}$

The Price Earnings ratio.