Calculate P Co's Book Value Per Share in 2012 and 2011

question 102

Multiple Choice

Calculate P Co's book value per share in 2012 and 2011 respectively.

• A)4.14 and cannot compute 2012's book value
• B)4.14 and 4.49
• C)4.21 and 4.42
• D)4.21 and cannot compute 2012's book value

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Definitions:

Weight of Preferred Stock

The proportion of preferred stock in a company’s capital structure, used in calculating the cost of capital or investment risk.

Weighted Average Cost of Capital

A calculation that reflects the cost of a company's capital, including equity and debt, weighted by their proportion in the total capital structure.

Bond Issue

The process by which a company, government, or other organization raises funds by issuing bonds to investors, who essentially lend money to the issuer in exchange for periodic interest payments and the return of principal at maturity.

Weight of Debt

A component of a firm's capital structure that quantifies the proportion of total capital represented by debt.