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At fiscal year end, December 31, 2018, Somerset Corporation had total stockholders' equity of $2,600,000. On...

At fiscal year end, December 31, 2018, Somerset Corporation had total stockholders' equity of $2,600,000. On FY 2018 year end, Somerset Corporation had Common Stock account of $1,200,000 of $10 par value common stock and Preferred Stock account of $100,000 of $100 par value.  There was no treasury stock. The preferred stock was noncumulative and had a call price of $103.  Use this information to determine the book value per share of Common Stock as of end of the FY 2018: (Round your answer to the nearest penny.)

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Answer #1

Answer:

Book value per share of common stock = $20.81

Explanation:

Total stock holder equity = $2600000

Preferred stock = $100000

Paid in capital preferred stock =( $100000 / $100) x $3 = $3000

Balance Amount for common stock holder = Total stock holder equity - Preferred Stock - Paid in capital preferred stock

= $2600000 - $100000 - $3000 = $2497000

Number of common share outstanding = $1200000 / $10 = 120000

Book value per share of common stock = Amount available for common stock / Number of share outstanding

= $2497000 / 120000

= $20.81 per share.

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