Please could someone give a detailed answer to this problem ? The final answer has to be as : 16:1
On December 31, 2014 and 2015, Williams Corporation had 100,000 shares of common stock and 50,000 shares of noncumulative and nonconvertible preferred stock issued and outstanding. Additional information:
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Stockholders' equity at 12/31/2015 ...................
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$4,500,000
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Net income year ended 12/31/2015 .....................
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1,200,000
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Dividends on preferred stock year ended 12/31/2015 ...
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300,000
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Market price per share of common stock at 12/31/2015 .
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144
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The price-earnings ratio on common stock at December 31, 2015, was
a. 10 to 1.
b. 12 to 1.
c. 14 to 1.
d. 16 to 1.