Chapter 11, Problem 16E

To determine

Stockholder’s Equity:

It refers to the total amount of money that belongs to the shareholders of the company. It can be equity shareholders or preference shareholders.

Book value per share:

It shows the value of each share according to financial statement of the company. It is calculated by subtracting preferred stock from stockholder’s equity then by dividing the remaining by number of common shares.
Formula to calculate book value per share is,

$\text{Book}\text{value}\text{per}\text{share}=\frac{\text{Stockholders'}\text{Equity}-\text{Preferred}\text{Stock}}{\text{Number}\text{of}\text{Common}\text{Shares}}$

Preferred Stock:

It is the total value of capital held by preference shareholders. It is a part of the shareholder’s equity.

To compute: Book value of share.