Wiggins Company has 1,000 shares of $10 par preferred stock, which were issued at par. It also has 25,000 shares of common stock outstanding, and its total stockholders' equity equals $500,000. The book value per common share is:

Question

Quizplus · Accepted Answer

The book value per common share is calculated by subtracting the preferred stock value from total stockholders' equity and then dividing by the number of common shares. Preferred stock value is 1,000 shares * $10 = $10,000. So, ($500,000 - $10,000) / 25,000 = $19.60.

Wiggins Company Has 1,000 Shares of $10 Par Preferred Stock