As a shareholder of an oil company, you receive its annual report. In the financial statements, the firm reported assets of $15 million, liabilities of $8 million, after-tax earnings of $2 million, and 830,000 outstanding shares of common stock.
a. Calculate the earnings per share of this oil company’s common stock. (Round your answer to 2 decimal places. Omit the "$" sign in your response.) Earnings per share $
b. Assuming a share of this oil company’s common stock has a market value of $40, what is the firm’s price–earnings ratio? (Round your intermediate calculations to 2 decimal places and final answer to the nearest whole number.) Price-earnings ratio