Meyer has 1,000 shares of 8% cumulative preferred stock outstanding, with a par value of $100 and liquidation value of $110. Meyer has 20,000 shares of common stock outstanding, with a par value of $20. Meyer had retained earnings at the beginning of the year of $5,000,000. Net income for the year was $70,000. This year, for the first time in its history, Meyer paid no dividends on preferred or common stock.   Required: a. Calculate the total book value of Meyer's common stock.     b. What is the book value per share of Meyer's common stock? (Rou

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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An analyst gathers the following information about Meyer, Incorporated:

  • Meyer has 1,000 shares of 8% cumulative preferred stock outstanding, with a par value of $100 and liquidation value of $110.
  • Meyer has 20,000 shares of common stock outstanding, with a par value of $20.
  • Meyer had retained earnings at the beginning of the year of $5,000,000.
  • Net income for the year was $70,000.
  • This year, for the first time in its history, Meyer paid no dividends on preferred or common stock.

 

Required:

a. Calculate the total book value of Meyer's common stock.

 

 


b. What is the book value per share of Meyer's common stock? (Rou

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