A Corporation Reports the Following Year-End Stockholders' Equity Determine the Following:
(1)Par Value for the Preferred Stock

question 188

Essay

A corporation reports the following year-end stockholders' equity:
$\begin{array}{|l|r|}\hline \text { Contributed capital: } & \\\hline \text { Preferred stock, } 8 \%, 100,000 \text { shares authorized, } 50,000 \text { shares issued } & \$ 2,500,000 \\\hline \text { Contributed capital in excess of par, Preferred } & 125,000 \\\hline \text { Common stock, } \$ 10 \text { par, } 500,000 \text { shares authorized, } 400,000 \text { shares issued } & 4,000,000 \\\hline \text { Contributed capital in excess of par, Common } & \underline{1,200,000} \\\hline \text { Total contributed capital } & \$ 7,825,000 \\\hline \text { Retained earnings } & 10,775,000 \\\hline \text { Total stockholders' equity } & \$ 18,600,000 \\\hline\end{array}$

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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Definitions:

Stock Index

A measurement of a section of the stock market calculated from the prices of selected stocks, representing a specific market or sector.

Futures Contracts

Financial contracts obligating the buyer to purchase an asset or the seller to sell an asset, such as a physical commodity or a financial instrument, at a predetermined future date and price.

Electronic Networks

Systems or platforms that facilitate the trading of financial instruments, such as stocks and currencies, digitally and without a physical trading floor.

Trading Pits

Physical locations on the floor of some exchanges where traders use open outcry and hand signals to buy and sell commodities or financial instruments.