Wiggins Company has 1,000 shares of $10 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)$16.00.
B)$19.60.
C)$19.96.
D)$20.00.
E)$10.00.

Question

Quizplus · Accepted Answer

To find the book value per common share, first calculate the total value of preferred stock: 1,000 shares * $10 par = $10,000. Subtract this from total stockholders' equity: $500,000 - $10,000 = $490,000. Divide this by the number of common shares: $490,000 / 25,000 shares = $19.60.

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