A company has $595,000 in total stockholders' equity. Preferred stock outstanding is valued at $150,000, and 75,000 shares of common stock are outstanding. Its book value per common share is $7.93.
($595,000 - $150,000)/75,000 shares = $5.93/share

Question

Quizplus · Accepted Answer

The calculation for book value per common share is incorrect. It should be: 
(($595,000 - $150,000) / 75,000 shares) = $5.93/share of common stock. 
Therefore, the statement "Its book value per common share is $7.93" is false.

A Company Has $595,000 in Total Stockholders' Equity