Question

Wiggins Company has 1,000 shares of $10 par preferred stock, which were issued at par. It also has 25,000 shares of common stock outstanding, and its total stockholders' equity equals $500,000. The book value per common share is:

Answer 1

Answer:

Book value par common share will be $19.6

Explanation:

We have given number of preferred stock = 1000

Value of preferred stock = $10 par preferred stock

So preferred Stock = 1000 x $10 = $10000

Total Stockholder's equity = $500000

Thus Common stock value = $500000 - $10000 = $490000

Total number of common stock = 25000 shares

So the book value per common share is = $\frac{490000}{25000}=19.6$