Brown Fashions Inc.'s December 31, 2012 balance sheet showed total common equity of $4,050,000 and 200,000 shares of stock outstanding. During 2012, the firm had $450,000 of net income, and it paid out $100,000 as dividends. What was the book value per share at 12/31/12, assuming no common stock was either issued or retired during 2012?

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The book value per share is calculated by dividing the total common equity by the number of shares outstanding. Here, $4,050,000 / 200,000 shares = $20.25. However, the net income increases equity by $450,000 and dividends decrease it by $100,000, resulting in a net increase of $350,000. The new equity is $4,050,000 + $350,000 = $4,400,000. Thus, the book value per share is $4,400,000 / 200,000 shares = $22.00.