Backer, Inc. reporting the following:
8% cumulative preferred stock, par value $100 per share; 10,000 shares issued and outstanding (liquidation value $107) $1M
Common stock, par value $10 per share, 50,000 shares issued and outstanding 550,000
APIC 75,000
RE 450,000
Dividends are in arrears on the preferred stock for 3 years including the CY. what is the book value per share of common stock?
$14.30
1,000,000
500,000
75,000
450,000
________
2,025,000
Less preferred stock: liquidation value (10,000 * 107) <1,070,000>
Dividends in arrears (10,000 * $8 * 3 years) < 240,000>
Total value of common stock 715,000/
Divided by common shares outstanding 50,000 = 14.30
can someone please help me understand where the $8 comes from in the dividends in arrears part???
A - 75
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