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Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN: 9781337115773
Author: Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher: Cengage Learning
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What is the price earnings ratio for this accounting question

Transcribed Image Text:Farrell Company has provided the following data:
Common stock:
Shares outstanding
30,000
Market value, December 31
$165,000
Book value, December 31
$90,000
Dividends paid
$50,000
Preferred stock, 10%, $100 par $100,000
Net income
$150,000
Interest on long-term debt
$15,000
The price-earnings ratio is:
A. 1.10
B. 1.18
C. 1.65
D. 1.83
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