Question

James Company has 1,400 shares of $100 par preferred stock, which were issued at par. It also has 29,000 shares of common stock outstanding, and its total stockholders' equity equals $615,600. The book value per common share is:

Answer 1

$16.4

Step-by-step explanation:

Given: Preferred stock= 1400 shares of $100

Total share outstanding= 29000

Total shareholder´s equity= $615600.

Now, calculating the book value per shares.

Formula; Book value per shares=
`((Total\ equity-preferred\ equity))/(Total\ shares\ outstanding)`

Preferred stock=
`1400 shares * \$ 100= \$ 140000`

∴ Preferred stock= $140000.

Book value per shares=
`((615600-140000))/(29000) = (475600)/(29000)`

∴ Book value per share= $16.4