Raphael Corporation’s common stock is currently selling on a stock exchange at $
ID: 2518568 • Letter: R
Question
Raphael Corporation’s common stock is currently selling on a stock exchange at $181 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
$
75,000
Common stock—$___ par value, 4,000 shares authorized, issued,
and outstanding
140,000
Retained earnings
350,000
Total stockholders' equity
$
565,000
Required:
1. What is the current market value (price) of this corporation’s common stock?
Raphael Corporation’s common stock is currently selling on a stock exchange at $181 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
$
75,000
Common stock—$___ par value, 4,000 shares authorized, issued,
and outstanding
140,000
Retained earnings
350,000
Total stockholders' equity
$
565,000
2. What are the par values of the corporation’s preferred stock and its common stock?
corporations preferred stock
Corporation's common stock
Raphael Corporation’s common stock is currently selling on a stock exchange at $181 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
$
75,000
Common stock—$___ par value, 4,000 shares authorized, issued,
and outstanding
140,000
Retained earnings
350,000
Total stockholders' equity
$
565,000
3. If no dividends are in arrears, what is the book value per share of common stock?
Raphael Corporation’s common stock is currently selling on a stock exchange at $181 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
$
75,000
Common stock—$___ par value, 4,000 shares authorized, issued,
and outstanding
140,000
Retained earnings
350,000
Total stockholders' equity
$
565,000
4. If two years’ preferred dividends are in arrears, what is the book value per share of common stock?
Raphael Corporation’s common stock is currently selling on a stock exchange at $181 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
$
75,000
Common stock—$___ par value, 4,000 shares authorized, issued,
and outstanding
140,000
Retained earnings
350,000
Total stockholders' equity
$
565,000
5.1 If two years’ preferred dividends are in arrears and the board of directors declares cash dividends of $15,250, what total amount will be paid to the preferred and to the common shareholders?
5.2 What is the amount of dividends per share for the common stock? (Round your answer to two decimal places.)
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Preferred stock—5% cumulative, $___ par value, 1,000 shares
authorized, issued, and outstanding
$
75,000
Common stock—$___ par value, 4,000 shares authorized, issued,
and outstanding
140,000
Retained earnings
350,000
Total stockholders' equity
$
565,000
Explanation / Answer
1)current market value of common stock =shares outstanding *market price
= 4000*181
=724000
2)par value :preferred shares= 75000/1000=$ 75 per share
common shares= 140000/4000=$ 35 per share
3)book value for common shares =[paid in capital +retained earning ]/number of shares
=[140000+350000]/4000
= 122.50 per share
4)Preferred dividend for 2 years :75000*.05= 3750 per year or 3750*2 = 7500
Book value per share for common shares :[140000+350000-7500]/4000 = $ 120.63 per share
5-1)Preferred dividend= 7500 past year+ 3750 current = 11250
common stock dividend =15250-11250= 4000
5-2)common stock dividend per share =4000/4000 =$ 1 per share
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