Ballard Corporation has retained earnings of $200,000. It has 5,000 shares of 6 percent, $100 par value preferred stock outstanding that is callable at 102. The preferred stock is cumulative, and one year of dividends is in arrears. It also has 10,000 shares of $50 par value common stock outstanding. Assume all stock is issued at par. The book value of each share of common stock is

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The book value of each share of common stock is calculated as follows:Book value per share of common stock = (Total equity - Total preferred stock) / Number of common shares outstandingTotal equity = Retained earnings + (Preferred stock par value * Number of preferred shares) = $200,000 + ($100 * 5,000) = $700,000Total preferred stock = Preferred stock par value * Number of preferred shares + Dividends in arrears = ($100 * 5,000) + ($6 * 5,000 * 1) = $530,000Number of common shares outstanding = 10,000Book value per share of common stock = ($700,000 - $530,000) / 10,000 = $66

Ballard Corporation Has Retained Earnings of $200,000