Symons Corporation has provided the following financial data:
December 31, Year 2 and Year 1
|Year 2||Year 1|
|Total current assets||603,000||530,000|
|Plant and equipment, net||810,000||840,000|
|Liabilities and Stockholders' Equity|
|Notes payable, short term||54,000||50,000|
|Total current liabilities||346,000||310,000|
|Common stock, $5 par value||250,000||250,000|
|Additional paid-in capital-common stock||70,000||70,000|
|Total stockholders' equity||897,000||890,000|
|Total liabilities & stockholders' equity||$1,413,000||$1,370,000|
For the Year Ended December 31, Year 2
|Sales (all on account)||$1,260,000|
|Cost of goods sold||760,000|
|Net operating income||26,571|
|Net income before taxes||13,571|
|Income taxes (30%)||4,071|
Dividends on common stock during Year 2 totaled $2,500.
The market price of common stock at the end of Year 2 was $2.01 per share.
The company's book value per share at the end of Year 2 is closest to:
- a) $17.94 per share.
- b) $28.26 per share.
- c) $ 0.19 per share.
- d) $11.54 per share.
Book Value Per Share:
Book-value per share is computed based on the historical costs unlike the market price per share which is computed based on the market. The book value per share computes the per share value of a company based on the stockholders equity i.e the amount available for equity shareholders after meeting all the liabilities. Book value per share = Common stockholders equity / Number of shares outstanding.
Answer and Explanation:
Option a) $17.94 per share is correct.
- Common stockholders equity in year 2 = 897,000
- Number of shares outstanding = Common stock value / Par...
See full answer below.
Become a member and unlock all Study Answers
Try it risk-free for 30 daysTry it risk-free
Ask a question
Our experts can answer your tough homework and study questions.Ask a question Ask a question
Learn more about this topic:
from Organizational Behavior: Help and ReviewChapter 18 / Lesson 13