Book value per share of preferred stock is computed as total stockholders' equity less the amount assigned to common stock plus any dividends in arrears divided by the number of shares of preferred stock outstanding.

Question

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Book value per share of preferred stock is typically computed as the liquidation value of the preferred stock plus any dividends in arrears divided by the number of shares of preferred stock outstanding. It does not involve subtracting the amount assigned to common stock from total stockholders' equity.

Book Value Per Share of Preferred Stock Is Computed as Total