Please Refer to the Equity Section Shown Below Assume the Preferred Shares Have No Stated Liquidation Value

question 47

Multiple Choice

Please refer to the equity section shown below:
$\begin{array}{|l|l|}\hline\text { Preferred stock, } \$ 100 \text { par, } 4 \% \text { non-cumulative } & \$ 20,000 \\\hline 1,000 \text { shares authorized, } 200 \text { shares outstanding } & \\\hline \text { Common stock, } \$ 0.01 \text { par } & 400\\\hline 1,000,000 \text { shares authorized, } 40,000 \text { shares outstanding } & \\\hline \text { Paid-in capital in exces of par } & 359,600 \\\hline \text { Retained earnings } & 820,000 \\\hline \text { Total stockholders' equity } & \$ 1,200,000\\\hline\end{array}$
Assume the preferred shares have no stated liquidation value. The preferred shares are non-cumulative, so there are no dividends in arrears.
Please calculate the book value per share of common stock.

• A) $30.00 per share
• B) $8.99 per share
• C) $9.00 per share
• D) $29.50 per share

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Definitions:

Aboveground

Pertaining to or situated on the surface of the earth; not underground or underwater.

Sexual Spore

A reproductive structure in fungi and some plants formed by the fusion of two distinct parent cells, leading to genetic recombination and variation.

Club-Shaped

A term describing an object, organ, or structure that is broader or round at one end and tapers towards the other end, similar to the shape of a club.

Basidia

Specialized spore-producing cells found in the reproductive structures of basidiomycete fungi.