G eztomheducationcomhmtpx 153 points Exercise 1116 Book valu

G ezto.mheducation.com/hm.tpx 1.53 points Exercise 11-16 Book value per share LO A4 The equity section of Cyril Corporation\'s balance sheet shows the following Preferred stock-7% cumulative, $15 par value, s20 call pnce, 10,000 shares issued and outstanding Common stock $10 par value, 35,000 shares issued and outstanding Retained earnings $ 150,000 350,000 267,500 Total stockholders\' equity s 767,500 Determine the book value per share of the preferred and common stock under two separate situations 1. No preferred dividends are in arrears Book Value Per Preferred Share Choose Denominator: Book Value Per Preferred Share Book value per preferred share Choose Numerator: Choose Numerator: Choose Denominator: Book Value Per Common Share Book value per common share

Solution

Req 1. No Preferred Dividend in arrears Book Value per Preferred Share: Preferred Sstock capital    / Number of Preferred Shares = Book value per Pref. Share 150000     / 10000      = $15 Book Value per Common Stock: Common Stock+Retained earnings   / Number of Common Stock= Book Value per Share 617500 35000 17.64 Req 2: Total Book value for Preferred Shares: Preferred Share capital: 150000 Add: Three Annual Dividend 31500 (150000*7% *3 years) Total Book value for Preferred Shares: 181500 Total Book value of Common StockholderS: Common Stock capital 350000 Add: Remaining balance of RE 236000 (267500-31500) Total Book value of Common StockholderS: 586000 Book Value per Preferred Share: Book Value of Preferred Sstock / Number of Preferred Shares = Book value per Pref. Share 181500   / 10000      = 18.15 Book Value per Common Stock: Book value of Common Stock   / Number of Common Stock= Book Value per Share 586000 35000 16.74