Richards Corporation Had Net Income of $250,000 and Paid Dividends

Multiple Choice

Richards Corporation had net income of $250,000 and paid dividends to common stockholders of $50,000. It had 50,000 shares of common stock outstanding during the entire year. Richards Corporation's common stock is selling for $35 per share. The price-earnings ratio is

A) 7 times
B) 14 times
C) 2 times
D) 5 times