Santa Fe Boat Yard has total stockholders\' equity of $3,650,000, comprised of t

Question

Santa Fe Boat Yard has total stockholders' equity of $3,650,000, comprised of the following: - $1,170,000 in $5 preferred stock consisting of 11,700 shares of $100 par value. - $640,000 in common stock of $8 par value per value. - $700,000 of additional paid-in capital. - $1,140,000 in retained earnings. Assuming there are no dividends in arrears, the book value per share of common stock is: $45.63. $8.00. $23.00. $31.00. $45.63. $8.00. $23.00. $31.00. Santa Fe Boat Yard has total stockholders' equity of $3,650,000, comprised of the following:

Explanation / Answer

From what I read from my book and calculation, I get $31.00 Financial and Managerial Accounting - Mcgraw Book Value When a Company Has Both Preferred and Common Stock Book value is usually computed only for common stock. If a company has both preferred and common stock outstanding, the computation of book value per share of common stock requires two steps. First, the amount assigned to preferred stock and any dividends in arrears are deducted from total stockholders' equity. Second, the remaining amount of stockholders' equity is divided by the number of common shares outstanding to determine book value per common share. This procedure reflects the fact that the common stockholders are the residual owners of the corporate entity.

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.