Problem 3 (Adapted) Shalom corporation’s current balance sheet reports the following shareholder’s equity: 5% cumulative preference share, par value, 100 per share, 50,000 shares issued and outstanding 5,000,000 Ordinary share, par value 35 per share, 200,000 shares issued, And outstanding 7,000,000 Share premium in excess of par value of ordinary share 2,500,000 Retained Earnings 6,000,000 Dividends in arrears on the preference share amount to 500,000. If Shalom were to be liquidated, the preference shareholders’ would receive par value plus a premium of 1,000,000. How much would be the book value per share of ordinary share?
Problem 3 (Adapted) Shalom corporation’s current balance sheet reports the following shareholder’s equity: 5% cumulative preference share, par value, 100 per share, 50,000 shares issued and outstanding 5,000,000 Ordinary share, par value 35 per share, 200,000 shares issued, And outstanding 7,000,000 Share premium in excess of par value of ordinary share 2,500,000 Retained Earnings 6,000,000 Dividends in arrears on the preference share amount to 500,000. If Shalom were to be liquidated, the preference shareholders’ would receive par value plus a premium of 1,000,000. How much would be the book value per share of ordinary share?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Problem 3 (Adapted)
Shalom corporation’s current
5% cumulative
50,000 shares issued and outstanding 5,000,000
Ordinary share, par value 35 per share, 200,000 shares issued,
And outstanding 7,000,000
Share premium in excess of par value of ordinary share 2,500,000
Dividends in arrears on the preference share amount to 500,000. If Shalom were to be
liquidated, the preference shareholders’ would receive par value plus a premium of 1,000,000.
How much would be the book value per share of ordinary share?
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