The stockholders\' equity section of the balance sheet for Mann Equipment Co. at

Question

The stockholders' equity section of the balance sheet for Mann Equipment Co. at December 31, 2018, is as follows Stockholders' Equity Paid-in capital Preferred stock,? par value, 6% cumulative, 100,000 shares authorized, 10,000 shares issued and outstanding $ 200,000 Common stock, $10 stated value, 200,000 shares authorized, 10e,000 shares issued and?? shares outstanding 1,000,000 25,000 500,000 Paid-in capital in excess of par-Preferred Paid-in capital in excess of stated value-Common 1,725,0e0 420,000 Total paid-in capital Retained earnings Treasury stock, 1,000 shares Total stockholders' equity 13,090) $2,132,000 Note: The market value per share of the common stock is $42, and the market value per share of the preferred stock is $26 Required a. What is the par value per share of the preferred stock? b. What is the dividend per share on the preferred stock? C. What is the number of common stock shares outstanding? d. What was the average issue price per share (price for which the stock was issued) of the common stock? f. If Mann Equipment Company declared a 2-for-1 stock split on the common stock, how many shares will be outstanding after the split? What amount will be transferred from the retained earnings account because of the stock split? Theoretically, what will be the market price of the common stock immediately after the stock split?

Explanation / Answer

Requirement a: Par Value per share of preferred stock: A Par Value of preferred stock 200000 B Outstanding Shares 10000 C Par Value per share of preferred stock (A/B) 20 Requirement b: Dividend per share of preferred stock: A Par Value per share of preferred stock 20 B Rate of Dividend 6% C Dividend per share of preferred stock (A*B) 1.2 Requirement c: Number of common stock shares outstanding: Given, A Issued Common Stock Shares 100000 B Treasury Stock 1000 C Common Stock Shares Outstanding (A-B) 99000 Requirement d: Average Isuue Price per share of Common Stock: A Stated Value of Common Stock Shares 1000000 B Paid in capital in excess of stated value 500000 C Issue Value of Common Stock Shares (A+B) 1500000 D Number of Common Stock Shares Issued 100000 E Average Issue Price per share of Common Stock (C/D) 15 Requirement f: A Shares Outstanding before split 99000 B Shares Outstanding after stock split (A*2) 198000 C Amount transferred from retained earnings Nil D Market Price Before split 42 E Market Price of Common Stock after split (E/2) 21

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