Compute the Book Values Per Share for (A)preferred and (B)common

question 57

Essay

Compute the book values per share for (a)preferred and (b)common stock for Klemperer Corporation,whose stockholders' equity as of December 31,20xx,was as follows.
$\begin{array}{|lr|}\hline\begin{array}{c}\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\text { Stockholders' Equity }\\\end{array}\\ \text {Contributed capital}\\ \text {Preferred stock-6 percent cumulative, \( \$ 100 \) par value, }\\ \text {40,000 shares issued and outstanding ( 1 year's dividends }\\ \text {in arrears), callable at 110}&\$4,000,000\\ \text {Common stock- \( \$ 5 \) par value, \( 4,000,000 \) shares authorized,}\\3,200,000 \text { shares issued and outstanding } & 16,000,000 \\\text { Additional paid-in capital, common } & 8,400,000 \\\text { Total contributed capital } & \$ 28,400,000 \\\text { Retained earnings } & 3,600,000 \\\text { Total stockholders' equity } & \$ 32,000,000 \\\hline\end{array}$

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Definitions:

Circular Sphincter

A circular muscle that constricts or dilates to regulate the passage of substances through an opening in the body, such as the pyloric sphincter in the digestive system.

Peristalsis

The involuntary constriction and relaxation of the muscles of the intestine or another canal, creating wavelike movements that push the contents forward.

Sartorius

A long narrow muscle of the thigh; the longest muscle of the body.

Duchenne's

Often referring to Duchenne muscular dystrophy, a genetic disorder characterized by progressive muscle degeneration and weakness.