Question

The stockholders’ equity section of Montel Company’s balance sheet follows. Preferred stock—5% cumulative, $10 par value, 16,000 shares authorized, issued and outstanding $ 160,000 Common stock—$5 par value, 370,000 shares authorized, 320,000 shares issued and outstanding 1,600,000 Retained earnings 992,000 Total stockholders' equity $ 2,752,000 Determine the book value per share of the common stock.

Answer 1

$8.1 per share

Step-by-step explanation:

The computation of the book value per share is shown below:

Book value per share = (Total equity - preference dividend) ÷ (number of shares)

= ($2,752,000 - $160,000) ÷ (320,000 shares)

= ($2,592,000) ÷ (320,000 shares)

= $8.1 per share

All other information which is given is not relevant. Hence, ignored it