1. The net income of a firm is $1,200,000. The firm has 100,000 of preferred shares outstanding and 500,000 common shares outstanding. The preferred stock pays $3 per shares divident. Earning per share for the firm is
a. $3.00
b. $ 12.00
c. $ 2.00
d. $ 1.80
e. $ 2.40
2. A firm has net income of $500,000 and sales of 2,900,000. its interest expense is $40,000, and the firm's tax rate is 40%. its operating margin is
a. 17.2%
b. 44.5%
c. 41.6%
d. 28.7%
e. 30.1 %
3. You read in the stock pages of the Wall Street Journal that thr ABC company has a price earnings ratio of 5 and a closing stock price of $20. What are the annual earnings per share for the ABC company?
a. $1.00
b. $2.00
c. $3.00
d. $4.00
e. $ 5.00