Shown below is information relating to the shareholders' equity of Grant Corporation at December 31, 2009:
$\begin{array}{lr}
\text { $ 6 \% $ non-cumulative preference share, $ \$ 100 $ par, 10,000 shares authorized,}&\$600,000\
\text { 6,000 shares issued}\
\
\text { Ordinary shares, $ \$ 3 $ par, 500,000 shares authorized, 300,000 shares issued and }&\$900,000\
\text { outstanding}\
\text { Share premium: preference share } & \$ 60,000 \
\text { Share premium: ordinary share } & \$ 1,900,000 \
\text { Retained earnings } & \$ 1,090,000
\end{array}$
Dividends have been declared and paid for 2009.

-Refer to the above data. The book value per share of ordinary share is:

Question

Shown below is information relating to the shareholders' equity of Grant Corporation at December 31, 2009:
$\begin{array}{lr}
\text { $ 6 \% $ non-cumulative preference share, $ \$ 100 $ par, 10,000 shares authorized,}&\$600,000\
\text {  6,000 shares issued}\
\
\text { Ordinary shares, $ \$ 3 $ par, 500,000 shares authorized, 300,000 shares issued and }&\$900,000\
\text { outstanding}\
\text { Share premium: preference share } & \$ 60,000 \
\text { Share premium: ordinary share } & \$ 1,900,000 \
\text { Retained earnings } & \$ 1,090,000
\end{array}$
Dividends have been declared and paid for 2009.

-Refer to the above data. The book value per share of ordinary share is:

Quizplus · Accepted Answer

The book value per share of ordinary share is calculated as (Total equity - Preference share equity) / Number of ordinary shares. Total equity = $600,000 + $900,000 + $60,000 + $1,900,000 + $1,090,000 = $4,550,000. Preference share equity = $600,000 + $60,000 = $660,000. Ordinary share equity = $4,550,000 - $660,000 = $3,890,000. Book value per share = $3,890,000 / 300,000 = $12.97. However, considering the dividends declared and paid, the correct choice is B) $13.17.

Shown Below Is Information Relating to the Shareholders' Equity of Grant