question archive A corporation reports the following year-end stockholders' equity: Contributed capital: Preferred stock, 8%, 100,000 shares Authorised 50,000 share issued $ 2,500,000 Contributed capital in excess of par, Preferred
A corporation reports the following year-end stockholders' equity: Contributed capital: Preferred stock, 8%, 100,000 shares Authorised 50,000 share issued $ 2,500,000 Contributed capital in excess of par, Preferred
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A corporation reports the following year-end stockholders' equity:
Contributed capital: Preferred stock, 8%, 100,000 shares Authorised 50,000 share issued $ 2,500,000
Contributed capital in excess of par, Preferred. 125,000
Common stock, $10 par, 500,000 shares Authorised , 400,000 share issued 4,000,000
Contributed capital in excess of par, Common .1,200.000
Total contributed capital7,825,000
Retained earnings10.775,000
Total stockholders' equity. 18,600,000
Determine the following:
(1) Par value for the preferred stock.
(2) Book value per share for both preferred stock and common stock assuming a call price per share of $52 for preferred and no dividends in arrears
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Answer:
1. Par value of preferred stock = total preferred stock value / no of shares
Par value of preferred stock = 2500000 / 50000
Par value of preferred stock = $50
2. Computation of common stockholder equity:
Total stockholder equity = $18600000
Preferred equity (50000 * 52) = $2600000
Common stockholder equity = Total stockholder equity - Preferred equity
Common stockholder equity = 18600000 - 2600000
Common stockholder equity = $ 16000000
Book value per share of common stock = Common stockholder equity / no of shares issued
Book value per share of common stock = 16000000 / 500000
Book value per share of common stock = $32
Book value per share of preferred stock = Preferred equity / no of shares issued
Book value per share of preferred stock = 2600000 / 50000
Book value per share of preferred stock = $ 52
