The Following Account Balances Have Been Provided for the End

question 92

Multiple Choice

The following account balances have been provided for the end of the most recent year:

$\begin{array}{lr}\text { Total assets }&\$150,000\\\text { Total stockholders' equity. }&\$120,000\\\text { Total common stock ( } 5,000 \text { shares }) &\$50,000\\\text { Total preferred stock }(1,000 \text { shares }) &\$10,000\end{array}$

The book value per share of common stock is:

• A)$22
• B)$25
• C)$20
• D)$28

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Definitions:

Noncumulative

A term often used in the context of preferred stock dividends that indicates dividends not paid in one period do not need to be paid in future periods.

Nonparticipating

Refers to an insurance policy, financial instrument, or other contracts that do not entitle the holder to share in the profits or surplus of the issuer.

Cash Dividends

Payments made by a corporation to its shareholders out of its profits or reserves in the form of cash.