Chapter 13, Problem 24QS

Book value per common share

The stockholders’ equity section of Montel Company’s balance sheet follows. This year’s dividends on preferred stock have been paid and no preferred dividends are in arrears. Determine the book value per share of the common stock.

Preferred stock—5% cumulative, $10 par value, 20,000 shares authorized, issued, and outstanding	$ 200,000
Common stock—$5 par value, 200,000 shares authorized, 150,000 shares issued and outstanding	750,000
Retained earnings	900,000
Total stockholders’ equity	$1,850,000