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Homework answers / question archive / The balance sheet of Wireless, Inc
The balance sheet of Wireless, Inc., reported the following:6
Preferred stock, 9%, $20 par, 1,300 shares authorized, issued and outstanding = 00$2600
Common stock, no-par value, 12,000 shares authorized, 5,300 shares issued =0200,000
Retained earnings =0050,000
Total stockholders' equity =$276,000
Assume that wireless has paid preferred dividends for the current year and all prior years (no dividends in arrears).
Requirement
1. Compute the book value per share of the common stock.
Computation of Book Value per Share of the Common Stock:
Book Value per Share of the common stock = ( Common Stock + Retained Earnings)/Number of Common Shares Issued
Here,
Common stock = $200,000
Retained earnings = $50,000
Number of common shares issued = 5,300
Book value per share of the common stock = ($200,000+$50,000)/5,300 = $47.17
