Fluid inc common stock will trade at the priceearnings

Question

The FLUID CORP. for the year 2018

Earnings before interest and taxes                   $35 million

Interest expense                                           $5 million

Preferred stock dividends                               $4 million

Common stock dividend payout ratio                 30%

Common shares outstanding                           $2 million

Effective corporate income tax rate                   40%

The expected common stock dividend per share

Fluid Inc common stock will trade at the price/earnings ratio of 8, the market price per share.