Answer:
b. $7.50
Explanation:
<u>preferred:</u>
2,500 x $100 = $ 250,000
<u>Common Stock:</u>
100,000 x 3.5 = $ 350,000
<u>Adiitional Paid-in:</u> $ 125,000
<u>Retained Earnings:</u> $ 300,000
$25,000 unpaid dividends Preferred Stock
The common stock will be the valeu after the preferred stock, so we will decrease the unpaid dividend from the RE
350,000 + 125,000 + (300,000 - 25,000) = 750,000
Then we do 750,000/100,000 = 7.5 Book value per share
The liquidation premium should not be considered as the company is not intended to go bankrupcy