6) Please refer to the equity section of the balance sheet, below:
Common stock, $0.01 par
|
$500
|
1,000,000 shares authorized, 50,000 shares outstanding
|
|
Paid-in capital in excess of par
|
399,500
|
Retained earnings
|
150,000
|
Total stockholders' equity
|
$550,000
|
Please calculate the book value per share of common stock.
A) $3.00 per share
B) $8.00 per share
C) $11.00 per share
D) $29.50 per share
7) Porpoise Company has the following balances:
•Common stock: $2,000
•Paid-in capital in excess of par: $298,000
•Retained earnings: $420,000
The company has no preferred stock and has 24,000 shares of common stock outstanding.
How much is the book value per share of common stock?
A) $12.50 per share
B) $30.00 per share
C) $12.42 per share
D) $29.80 per share
8) Please refer to the equity section of the balance sheet, below:
Preferred stock, $50 par, 4%, cumulative
|
$5,000
|
1,000 shares authorized, 100 shares outstanding
|
|
Common stock, $0.01 par
|
120
|
1,000,000 shares authorized, 12,000 shares outstanding
|
|
Paid-in capital in excess of par
|
359,600
|
Retained earnings
|
153,280
|
Total stockholders' equity
|
$518,000
|
Assume there are no dividends in arrears. What is the book value per share of preferred stock?
A) $50.00 per share
B) $42.75 per share
C) $52.00 per share
D) $41.00 per share
9) Please refer to the equity section of the balance sheet, below:
Preferred stock, $50 par, 4%, cumulative
|
$5,000
|
1,000 shares authorized, 100 shares outstanding
|
|
Common stock, $0.01 par
|
120
|
1,000,000 shares authorized, 12,000 shares outstanding
|
|
Paid-in capital in excess of par
|
359,600
|
Retained earnings
|
153,280
|
Total stockholders' equity
|
$518,000
|
Assume there are no dividends in arrears. What is the book value per share of common stock?
A) $50.00 per share
B) $42.75 per share
C) $52.00 per share
D) $41.00 per share
10) Please refer to the equity section of the balance sheet, below:
Preferred stock, $50 par, 4%, cumulative
|
$5,000
|
1,000 shares authorized, 100 shares outstanding
|
|
Common stock, $0.01 par
|
120
|
1,000,000 shares authorized, 12,000 shares outstanding
|
|
Paid-in capital in excess of par
|
359,600
|
Retained earnings
|
153,280
|
Total stockholders' equity
|
$518,000
|
Assume there are $600 of preferred dividends in arrears which includes the current year. What is the book value per share of preferred stock?
A) $42.70 per share
B) $43.17 per share
C) $56.00 per share
D) $41.00 per share
11) Please refer to the equity section of the balance sheet, below:
Preferred stock, $50 par, 4%, cumulative
|
$5,000
|
1,000 shares authorized, 100 shares outstanding
|
|
Common stock, $0.01 par
|
120
|
1,000,000 shares authorized, 12,000 shares outstanding
|
|
Paid-in capital in excess of par
|
359,600
|
Retained earnings
|
153,280
|
Total stockholders' equity
|
$518,000
|
Assume there are $600 of preferred dividends in arrears which includes the current year. What is the book value per share of common stock?
A) $42.70 per share
B) $43.17 per share
C) $56.00 per share
D) $41.00 per share
Learning Objective 7
1) If a company has a strong rate of return on common stockholders' equity, that is an indication of strong profitability.
2) If a company has a strong rate of return on total assets, that shows that they can easily pay off their current liabilities with their current assets.
3) If a company has a strong rate of return on common stockholders' equity, that is an indication of good cash flow.
4) Which of the following measures a company's success in using assets to earn income?
A) The rate of return on stockholders' equity
B) Days sales in receivables
C) Inventory turnover
D) The rate of return on total assets