Biology Forums - Study Force

Given the following data for JetNew calculate the book value of a common share.

Share capital:
Preferred shares, 30,000 shares authorized,
   7,500 shares issued, redemption value, $55.50   $ 525,000
Common shares, 200,000 shares authorized,
   105,000 shares issued    682,500
   Total share capital   $1,207,500
Retained earnings    200,000
   Total shareholders' equity   $1,407,500

Next calculated the book value of a common share if the preferred shares are $5
cumulative and have two years worth of dividend outstanding.

Book value:
$1,407,500-$416,250=$991,250
$991,250/105,000 shares of common = $9.44 book value per share

Book value:
   7500 × $5 × 2 = $75,000
$1,407,500 - $416,250-$75,000 = $916,250 common
$916,250/105,000 = $8.73 book value per share