Problem 11.6A

# Problem 11.6A - stock An investor has to be careful when...

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Jason Wilcox Problem 11.6A A. 6819÷.50= B. 345,000 preferred stock x \$17.20= C.Legal Capital 93,069 + Additional paid-in captial 87,260= D. Total Shareholders Equity …………. ..237,592,000 Less:Claims on Preferred stockholders. .. 5,934,000 Equity of Common Stockholders…………232,658,000 Number of Common Shares Outstanding….13,638,000 Book Value Per share 232,658,000÷.13,638,000 E. The ADVANTAGES of being a public owned company are the limited stockholder liablity, meaning stockholder is not financial responsible for a lawsuit. It also is very easy to transfer F. Convertible stock is a term used to describe a feature of preferred stock. Covertible stock gives a preferred stockholder the ablity to convert the stock into common

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Unformatted text preview: stock. An investor has to be careful when deciding whether or not to covert because if the company is doing well than the common stock will rise thus increasing there investment. However if the company declines so will its common stock and the investor will lose more money than if they would have just left there stock as preferred. 13,638 Common Stock Issued and Outstanding \$5,934,000 Dividends to Preferred Stockholders \$180,329 Total Paid-In Capital BOOK VALUE = \$16.99 The DISADVANTAGES of being publicy owned are the stricter regulations set by the government and SEC. Publicy owned corporations are also taxed at a much higher rate and subject to double taxation...
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Problem 11.6A - stock An investor has to be careful when...

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