Avibank plastics generated an eps of $2.752.75 over the last 12 months. the company's earnings are expected to grow by 25.0 %25.0% next year, and because there will be no significant change in the number of shares outstanding, eps should grow at about the same rate. you feel the stock should trade at a p/e of around 3030 times earnings. use the p/e approach to set a value on this stock.

Grant, inc., acquired 30% of south co.’s voting stock for $200,000 on january 2, year 1, and did not elect the fair value option. the price equaled the carrying amount and the fair value of the interest purchased in south’s net assets. grant’s 30% interest in south gave grant the ability to exercise significant influence over south’s operating and financial policies. during year 1, south earned $80,000 and paid dividends of $50,000. south reported earnings of $100,000 for the 6 months ended june 30, year 2, and $200,000 for the year ended december 31, year 2. on july 1, year 2, grant sold half of its stock in south for $150,000 cash. south paid dividends of $60,000 on october 1, year 2. before income taxes, what amount should grant include in its year 1 income statement as a result of the investment?