Total equity: 379,000 - preferred 30,000 - divs due preferreds 3,600 = $345,400
(Senior claims to common stock include the value of preferred stock and dividends in arrears on preferred stock.)
345,400 / 10,000 shares issued = $34.54
I also assumed that the preferred stock is cumulative preferred.
Assets = Liability plus Stockholders Equity.
You're simply solving the equation for the unknown.
Preferred stock, $6, 6%...5,000 shares authorized and issued..$30,000...Common stock, $4.00 per value, 45,000 shares authorized; 10,000 shares issue..$40,000...Additional pain in capital-common...$219,000..Total paid in capital..$289,000..Retained Earnings...$90,000, Total stockholders Equity $379,000
Preferred dividend are in arrears for two years, including the current year. On the balance sheet date, the market value of the ballcraft common stock was $31 per share.
1. what is the total paid in capital for the company? $289,000
2. what was the total market value of the common stock? 10,000x 31= 310,000
3. compute the book value per share of the common stock.
I believe q'1 and 2 are correct but I don't know how to do # 3 ... please help.
