Soltech Company\'s common stock is currently selling on a stock exchange at $90
ID: 2460330 • Letter: S
Question
Soltech Company's common stock is currently selling on a stock exchange at $90 per share, and its current balance sheet shows the following stockholders' equity section.
Required (Round per share amounts to cents.)
What is the current market value (price) of this corporation's common stock?
What are the par values of the corporation's preferred stock and its common stock?
If no dividends are in arrears, what are the book values per share of the preferred stock and the common stock? (Round per share values to the nearest cent.)
If two years' preferred dividends are in arrears, what are the book values per share of the preferred stock and the common stock? (Round per share values to the nearest cent.)
If two years' preferred dividends are in arrears and the preferred stock is callable at $280 per share, what are the book values per share of the preferred stock and the common stock? (Round per share values to the nearest cent.)
If two years' preferred dividends are in arrears and the board of directors declares cash dividends of $100,000, what total amount will be paid to the preferred and to the common shareholders? What is the amount of dividends per share for the common stock? (Round per share values to the nearest cent.)
Explanation / Answer
Solution :
current market value (price) of this corporation's common stock
90
par values
Preferred stock (375000/1500 shares)
250
common stock (900000/18000 shares)
50
If no dividends are in arrears, what are the book values per share of the preferred stock and the common stock
Preferred stock (375000/1500 shares)
250
375,000
common stock (900000+1125000)/18000 shares
113
2,025,000
If two years' preferred dividends are in arrears, what are the book values per share of the preferred stock and the common stock
Preferred stock value outstanding
375,000
Add : preferred dividend in arrears (1500*250*8%*2)
60,000
attributable to preferred stock
435,000
No of preferredb shares outstanding
1,500
Book value per share of preferred stock (435000/1500)
290
Total stockholders' equity
2,400,000
Less: Equity attributable to preferred stock
- 435,000
Common stock equity
1,965,000
Number of common stock shares outstanding
18,000
Book value per share of common stock (1965000/18000)
109
If two years' preferred dividends are in arrears and the preferred stock is callable at $280 per share, what are the book values per share of the preferred stock and the common stock
Preferred stock value outstanding (1500shares*280)
420,000
Add : preferred dividend in arrears (1500*250*8%*2)
60,000
attributable to preferred stock
480,000
No of preferredb shares outstanding
1,500
Book value per share of preferred stock (480000/1500)
320
Total stockholders' equity
2,400,000
Less: Equity attributable to preferred stock
- 480,000
Common stock equity
1,920,000
Number of common stock shares outstanding
18,000
Book value per share of common stock (1920000/18000)
107
If two years' preferred dividends are in arrears and the board of directors declares cash dividends of $100,000, what total amount will be paid to the preferred and to the common shareholders? What is the amount of dividends per share for the common stock?
Dividends declared
100,000
Less: Dividends in arrears for 2 years (1500*250*8%*2)
- 60,000
Less :Current year dividends (1500*250*8%)
- 30,000
Dividends attributable to preferred shareholders
- 90,000
Dividends attributable to common shareholders
10,000
amount of dividends per share for the common stock
0.56
(10000/18000)
current market value (price) of this corporation's common stock
90
par values
Preferred stock (375000/1500 shares)
250
common stock (900000/18000 shares)
50
If no dividends are in arrears, what are the book values per share of the preferred stock and the common stock
Preferred stock (375000/1500 shares)
250
375,000
common stock (900000+1125000)/18000 shares
113
2,025,000
If two years' preferred dividends are in arrears, what are the book values per share of the preferred stock and the common stock
Preferred stock value outstanding
375,000
Add : preferred dividend in arrears (1500*250*8%*2)
60,000
attributable to preferred stock
435,000
No of preferredb shares outstanding
1,500
Book value per share of preferred stock (435000/1500)
290
Total stockholders' equity
2,400,000
Less: Equity attributable to preferred stock
- 435,000
Common stock equity
1,965,000
Number of common stock shares outstanding
18,000
Book value per share of common stock (1965000/18000)
109
If two years' preferred dividends are in arrears and the preferred stock is callable at $280 per share, what are the book values per share of the preferred stock and the common stock
Preferred stock value outstanding (1500shares*280)
420,000
Add : preferred dividend in arrears (1500*250*8%*2)
60,000
attributable to preferred stock
480,000
No of preferredb shares outstanding
1,500
Book value per share of preferred stock (480000/1500)
320
Total stockholders' equity
2,400,000
Less: Equity attributable to preferred stock
- 480,000
Common stock equity
1,920,000
Number of common stock shares outstanding
18,000
Book value per share of common stock (1920000/18000)
107
If two years' preferred dividends are in arrears and the board of directors declares cash dividends of $100,000, what total amount will be paid to the preferred and to the common shareholders? What is the amount of dividends per share for the common stock?
Dividends declared
100,000
Less: Dividends in arrears for 2 years (1500*250*8%*2)
- 60,000
Less :Current year dividends (1500*250*8%)
- 30,000
Dividends attributable to preferred shareholders
- 90,000
Dividends attributable to common shareholders
10,000
amount of dividends per share for the common stock
0.56
(10000/18000)
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