CALCULATOR Question1 The following information pertains to Parsons Co. Preferred

Question

CALCULATOR Question1 The following information pertains to Parsons Co. Preferred stock, cumulative: Par value per share Dividend rate Shares outstanding Dividends in arrears $100 8% 11,000 none Common stock: $10 135,000 $2.00 $49.00 $480/000 Unappropriated retained earnings (after closing) $250,000 Retained earnings appropriated for contingencies$310,000 Par value per share Shares issued Dividends paid per share Market price per share Additional paid-in capital Common treasury stock: 11,000 $260,000 $636,000 Number of shares Total cost Netincome Compute (assume no changes in balances during the past year): (Round per share and ratios to 2 decimal or 15.25%.) al amount of stockholders' equity in the balance sheet

Explanation / Answer

(a) Share Holders Equity

= (11000 x 100) + (135000 x 10) + 480,000 + 250000 + 310000 – 260000

= 32,30,000

(b)Earnings per share of common stock

          = [ 636000 – ( 11000 x 100 x 8% ) ] / (135000-11000)

          = $ 4.42 / Share

(c) Book value per share of common stock

          =       [ 3230000 – 1100000 ] / (135000-11000)

          =       $ 17.18 / Share

(d) Payout ratio of common stock

          =       $ 2 / $ 49 *100

          =       4.08%

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