Question

Stockholders' Equity: 5.5% preferred stock, $50 par value, callable at $101 per share, 1200 shares authorized………………..…..…………………….…….………….…………..…………….……………………......

Stockholders' Equity:
5.5% preferred stock, $50 par value, callable at $101 per share,
1200 shares authorized………………..…..…………………….…….………….…………..…………….……………………... $40,000
Common Stock, $1.5 par value, 200000 shares authorized……………………….....………………………………………………..… 216,000
Additional paid-in capital:
    Preferred Stock…………………………...…………………….……...………………………………………….. ######
    Common Stock……………………………………………………….…………………..……….….………………….. ###### 318,000
Retained Earnings…………………………………………………...……...………………………………………………………….. 226,800
    Total stockholders' equity $800,800
Questions:
How many shares of preferred stock have been issued?
What is the total annual dividend requirement on the outstanding preferred stock?
How many shares of common stock have been isued?
What is the average price per share received for common shares issued?
What is the total amount of legal capital?
What is the total paid-in capital?
What is the book value per share of common stock? (no dividends in arrears)
Business   Accounting   
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Homework Answers

Answer #1

1) Preferred stock issued = $40000 / $50 = 800 shares

2) Total annual dividend requirement on the outstanding preferred stock = 800 * $50 * 5.5% = $2200

3) Shares of Common stock have been issued = $216000 / $1.5 = 144000 shares

4) The average price per share received for common shares issued = ($216000 + 318000) / 144000 = $3.71 per share

5) The total amount of legal capital = Equity capital = $216000 + $318000 = $534000

6) Total paid-in-capital = Paid in capital in excess of par - common stock = $318000

7) The book value per share of common stock = (Paid up equity + retained earnings) / Number of common stock shares =( $534000 + 226800 ) / 144000 = $5.28 per share

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