Raphael Corporation’s common stock is currently selling on a stock exchange at $
ID: 2418777 • Letter: R
Question
Raphael Corporation’s common stock is currently selling on a stock exchange at $154 per share, and its current balance sheet shows the following stockholders’ equity section: Preferred stock—5% cumulative, $___ par value, 1,000 shares authorized, issued, and outstanding $ 50,000
Common stock—$___ par value, 4,000 shares authorized, issued, and outstanding 80,000
Retained earnings 300,000
Total stockholders' equity $ 430,000
What is the current market value (price) of this corporation’s common stock?
What are the par values of the corporation's preferred stock and its common stock?
If no dividends are in arrears, what are the book values per share of the preferred stock and the common stock?
If two years' preferred dividends are in arrears, what are the book values per share of the preferred stock and the common stock?
If two years’ preferred dividends are in arrears and the preferred stock is callable at $60 per share, what are the book values per share of the preferred stock and the common stock?
If two years’ preferred dividends are in arrears and the board of directors declares cash dividends of $19,500, what total amount will be paid to the preferred and to the common shareholders?
Explanation / Answer
What is the current market value (price) of this corporation’s common stock? $154 per share What are the par values of the corporation's preferred stock and its common stock? preferred stock =50000/1000 50 Common stock=80000/4000 20 If no dividends are in arrears, what are the book values per share of the preferred stock and the common stock? preferred stock =50000/1000 50 Common stock =(80000+300000)/4000 95 If two years' preferred dividends are in arrears, what are the book values per share of the preferred stock and the common stock? Preference Share 50000 Preference Dividend Arrears 50000*.05*2years 5000 Total Book value 55000 Book value Per share of prefferd share holder 55000/1000 55 Common stock=(80000+300000-5000)/4000 93.75 If two years’ preferred dividends are in arrears and the preferred stock is callable at $60 per share, what are the book values per share of the preferred stock and the common stock? Preferred stock call price (1,000 × $60) 60000 Preference Dividend Arrears 50000*.05*2years 5000 Total Book value 65000 Book value Per share of prefferd share holder 65000/1000 65 Total equity 430000 Less equity for preferred 65000 Book value of Common stock 365000 Book value Per share of common stock 365000/4000 91.25 If two years’ preferred dividends are in arrears and the board of directors declares cash dividends of $19,500, what total amount will be paid to the preferred and to the common shareholders? Preference Dividend Arrears 50000*.05*2years 5000 Current Year Dividend 50000*.05 2500 To preffered share holder 7500 Balance to Common Stock holder (19500-7500) 12000
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