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Cuba Corp Provides the Following Information for 2020:
Preferred Shares, 8

Question 160

Essay

Cuba Corp. provides the following information for 2020:
Preferred shares, 8%, par value $ 100, cumulative, callable:

 Call price per share .................................$105 Shares outstanding .................................5,000 Dividends in arrears ................................. none Common shares, no par value:  Shares is sued ............................................60,000 Dividends paid per share ............................  (a)  Market price per share .............................. (b)  Carrying value ......................................... $800,000 Retained earnings (after closing).............. $175,000 Treasury shares (common) ...................... $125,000 Number of treasury shares held ................ 5,000 Shareholders’ equity, Dec 31 ................... (c)  Net income for 2020 ................................  (d)  Earnings per share ................................... $4.00 Price earnings ratio of common shares ......9 Payoutratio .............................................. 40% Book value per common share ..................  (e) \begin{array}{ll} \quad\text{ Call price per share .................................} & \$ 105 \\ \quad\text{ Shares outstanding .................................} & 5,000 \\ \quad\text{ Dividends in arrears ................................. } & none \\\text{ Common shares, no par value: } \\ \quad\text{ Shares is sued ............................................} & 60,000 \\ \quad\text{ Dividends paid per share ............................ } & \quad\quad \textbf{ (a) } \\ \quad\text{ Market price per share ..............................} & \textbf{ (b) } \\ \quad\text{ Carrying value ......................................... } & \$ 800,000 \\\text{ Retained earnings (after closing).............. } & \$ 175,000 \\\text{ Treasury shares (common) ...................... } & \$ 125,000 \\ \quad\text{ Number of treasury shares held ................ } & 5,000 \\\text{ Shareholders' equity, Dec 31 ...................} &\quad\quad \textbf{ (c) } \\\text{ Net income for 2020 ................................ } &\quad\quad \textbf{ (d) }\\\text{ Earnings per share ................................... } & \$ 4.00 \\\text{ Price earnings ratio of common shares ......} & 9 \\\text{ Payoutratio .............................................. } & 40\% \\\text{ Book value per common share .................. } & \quad\quad \textbf{ (e) } \\ \end{array} Instructions
Complete the missing information.

Correct Answer:

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a) 40% x $ 4 = $ 1.60
b) 9 x $ 4 = $ 36
...

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