Please Refer to the Equity Section of the Balance Sheet

question 122

Essay

Please refer to the equity section of the balance sheet, below:
Assume there are $600 of preferred dividends in arrears which includes the current year. What is the book value per share of common stock?
A)$42.70 per share
B)$43.17 per share
C)$56.00 per share
D)$41.00 per share

• A)$42.70 per share
• B)$43.17 per share
• C)$56.00 per share
• D)$41.00 per share

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Definitions:

Gain On Bargain Purchase

Occurs when a company acquires another company for a price less than the fair market value of its net assets, resulting in a gain on the acquisition balance sheet.

Income Tax Expense

The accounting expense associated with the income taxes a company is obligated to pay to governmental authorities based on its taxable income.

Tax Rate

A percentage at which an individual or corporation is taxed; the tax authority sets it, and it can vary based on income, property value, sales price, etc.

Business Combination

The coming together of separate entities or businesses into one reporting entity via a merger, acquisition, or consolidation.