Question

Carmen Company has the following equity amounts and no dividends in arrears. Preferred stock, $1,000 par $24 million Common stock, $100 par $20 million Paid-in capital in excess of par $36 million Retained earnings $18 million What is the book value of Carmen's common stock

Answer 1

$370 book value.

Step-by-step explanation:

The computation of the book value of Carmen's common stock is shown below:

= $20 million + $36 million + $18 million

= $74 million.

Now

= $20 million total par value × $100 par value/share

= 200,000 shares

Now

= $74 million ÷ 200,000 shares

= $370 book value.