Help with Problem 11-5A Thank You 1. How many shares are outstanding on each cas

Question

Help with Problem 11-5A

Thank You

1. How many shares are outstanding on each cash dividend date?? 2. What is the dollar amount for each of the four cash dividends?? 3. What is the amount of the capitalization of retained earnings for the stock dividend? 4. What is the per share cost of the treasury stock purchased? 5. How much net income did the company earn during year 2014?? Raphael Corporation?s common stock is currently selling on a stock exchange at $85 per share, and its current balance sheet shows the following stockholders? equity section:

Explanation / Answer

1)

The current price of the stock is $85 per share.

2)

Par value of preferred stock = $50,000/1,000 = $50

Par value of common stock = $80,000/4,000 = $20

3)

If no dividends payable:

The book value per share of preferred stock = $50

The book value per share of common stock = $230,000/4,000 shares = $57.5

4)

The book value per share of preferred stock = ($50,000*5%*2) + 50,000/1,000

= $55,000/1,000

= $55

The book value per share of common stock = ($80,000 + 145,000 ) /4,000

= $225,000/4,000 shares

= $56.25

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