I am an accounting student and I am stuck on a few problems on my hw how do i ge
ID: 2387547 • Letter: I
Question
I am an accounting student and I am stuck on a few problems on my hw how do i get the average issue price per share?
A corporation reports the following stockholder’s equity as of December 31, 2008
Preferred stock, $50 par, 10% cumulative, 100,000
shares authorized and 90,000 shares issued $4,500,000
Paid-in capital in excess of par-common 945,000
Common stock, $10 par, 200,000 shares authorized
and 200,000 shares issued 2,000,000
Paid-in capital in excess of par-common 800,000
Total paid-in capital 8,245,000
Retained earnings 3,400,000
Total stockholder’s equity $11,645,000
A) What was the average issue price per share of common stock?
B) What was the average issue price per share of preferred stock?
C) The board of directors declares dividends of $1,900,000 in 2008. No dividends were declared in 2007 and there were no dividends in arrears prior to 2007. What is the amount per share each stock will receive?
If you could explain how I could get to my conclusion, because I have a whole packet of the same things to do
Explanation / Answer
Average issue price per common stock = (2000000+ 800000 )/200000 = 14 per share. Average issue price per preferred stock = (450,0000+ 945000 )/90000 = 60.5 per share. DIvidend declared = $ 1900,000 No dividend were given in 2007 . So dividend in arrears for 200 7 =450,000 DIvidend declared for this year = $ 1900,000 -450,000 = 1450,000 Less: dividend to pref. shareholders= 4500,000*10% =450,000 Remaning to common stock holders= 1,000,000 Preferred stock will get = 450000/90000 = $ 5 per share Common stock will get = 1000000/200000 = $ 5 per share
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