A company has 1,000 shares of $100 par preferred stock.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:
A)$15.38
B)$16.00
C)$19.23
D)$20.00
E)$100.00

Question

Quizplus · Accepted Answer

The total value of the preferred stock is $100 x 1,000 = $100,000.
The total value of the common stock is $500,000 - $100,000 = $400,000.
The book value per common share is therefore ($400,000 / 25,000) = $16.

A Company Has 1,000 Shares of $100 Par Preferred Stock