Compute RAR price-earnings ratio

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Problem - RAR Corporation had net income for 2018 of $44,000. RAR had 19,750 shares of common stock outstanding at the beginning of the year and 14,000 shares of common stock outstanding as of December 31, 2018. During the year, RAR declared and paid preferred dividends of $13,625. Therefore, RAR's earnings per share for 2018 is $1.80. Assume the market price of RAR's common stock is $9.00 per share. Compute RAR's price-earnings ratio.

Reference no: EM132793768

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