QUESTIONS 79 THROUGH 90 RELATE TO EQUITY INVESTMENTS

81. An analyst gathers the following information about a company:

Common stock $1.50 par value – Authorized 5,000,000 shares

-- Issued 4,000,000 shares

Additional paid-in-capital $20,000,000

Retained earnings $5,000,000

Treasury stock (500,000 shares) $10,000,000

Current price per share $21

The price-to-book (P/B) ratio of the company is closest to:

A. 2.31.

B. 3.50.

C. 4.20.