Question

James Company has 1,400 shares of $100 par preferred stock, which were issued at par. It also has 29,000 shares of common stock outstanding, and its total stockholders' equity equals $615,600. The book value per common share is:

Answer 1

Answer:

$16.4

Explanation:

Given: Preferred stock= 1400 shares of $100

           Total share outstanding= 29000

           Total shareholder´s equity= $615600.

Now, calculating the book value per shares.

Formula; Book value per shares= $\frac{(Total\ equity-preferred\ equity)}{Total\ shares\ outstanding}$

Preferred stock= $1400 shares \times \ 100= \ 140000$

∴ Preferred stock= $140000.

Book value per shares= $\frac{(615600-140000)}{29000} = \frac{475600}{29000}$

∴ Book value per share= $16.4