10% Preferred stock, $50 par; 500,000
Common stock, $10 par 600,000
Paid-in Capital; 400,000
Retained earnings; 1,000,000
Would it be:
1. 1,950,000 / 60,000
2. 1,950,000 / 55,000
3. 2,000,000 / 55,000
Book value per share of common stock is total shareholder's equity minus preferred dividends divided by total outstanding shares.
1. Total sh equity=re+cs+pic=$2000000
pref div=500000/50=10000 shs*$5=50000
outstanding cs=600000/10=60000
so ($2000000-$50000)/60000= #1