# Application problems 1

Jan 28th, 2015
Anonymous
Category:
Price: \$15 USD

Question description

Safin Corporation’s common stock is currently selling on a stock exchange at \$54 per share, and its current balance sheet shows the following stockholders’ equity section:

Preferred stock, 7% cumulative \$___ par value, 500 shares

authorized, issued, and outstanding \$ 40,000

Common stock, \$___ par value, 6,000 shares authorized, issued,

and outstanding 96,000

Retained earnings 232,000

Total stockholders’ equity \$368,000

#### Required

1. What is the current market value (price) of this corporation’s common stock?
2. What are the par values of the corporation’s preferred stock and its common stock?
3. If no dividends are in arrears, what are the book values per share of the preferred stock and the common stock?
4. If two years’ preferred dividends are in arrears, what are the book values per share of the preferred stock and the common stock?
5. If two years’ preferred dividends are in arrears and the preferred stock is callable at \$90 per share, what are the book values per share of the preferred stock and the common stock?
6. If two years’ preferred dividends are in arrears and the board of directors declares dividends of \$16,000, what total amount will be paid to the preferred and to the common shareholders? What is the amount of dividends per share for the common stock?

#### Analysis Component

7. What are some factors that can contribute to a difference between the book value of common stock and its market value (price)?

(Top Tutor) Mercy K
School: University of Virginia

Studypool has helped 1,244,100 students

Review from student
Anonymous
" Top quality work from this guy! I'll be back! "

1824 tutors are online

Brown University

1271 Tutors

California Institute of Technology

2131 Tutors

Carnegie Mellon University

982 Tutors

Columbia University

1256 Tutors

Dartmouth University

2113 Tutors

Emory University

2279 Tutors

Harvard University

599 Tutors

Massachusetts Institute of Technology

2319 Tutors

New York University

1645 Tutors

Notre Dam University

1911 Tutors

Oklahoma University

2122 Tutors

Pennsylvania State University

932 Tutors

Princeton University

1211 Tutors

Stanford University

983 Tutors

University of California

1282 Tutors

Oxford University

123 Tutors

Yale University

2325 Tutors