Check my work mode: This shows what is correct or incorrect for the work you hav
ID: 2393040 • Letter: C
Question
Check my work mode: This shows what is correct or incorrect for the work you have completed so far. It does no The equity section of Cyril Corporation's balance sheet shows the following. Preferred stock cumulative, $25 par value, s 250,80e 800,000 535,80e $1,585,800 1e,000 shares issued and outstanding Common stock-$8 par value, 1ee,ee0 shares issued and outstanding Total stockholders equity This year's dividends on preferred stock have been paid. Determine the book value per share of common stoo situations 1. No preferred dividends are in arrears. 2. Three years of preferred dividends are in arrears. Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1Required 2 Determine the book value per share of the preferred and common stock for no preferred dividends are in arreaExplanation / Answer
1.book value per share of preferred stock for no preferred dividends in arrears.
formula:
Book value per preferred share = share holder's equity applicable to preferred stock holders / number of preferred shares outstanding.
share holders equity applicable to preferres stock holders = 250,000.
number of preferred shares = 10,000.
Book value per preferred share = $250,000 / 10,000 =>$25 per share.
book value per share of common stock = share holders equity applicable to common share holders / number of common stock outstanding.
share holders equity applicable to common share holders= total share holders equity - share holders equity applied to preferred stock holders
=>1,585,000 -250,000
=>1,335,000.
number of common stock issued and outstanding = 100,000 shares.
Book value per share = 1,335,000 / 100,000
=>$13.35.
required 2:
3 years preferred dividend = 3 *250,000 * 6% =>$45,000.
book value per share of preferred share = ($250,000 +45,000) / 10,000 =>$29.50.
book value per share of common stock = (1,585,000 - 295,000) / 100,000 =>$12.90.
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