If preferred stock exists

If preferred stock exists - stock as the preferred stock is...

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If preferred stock exists, the preferred stockholders' equity is deducted from total stockholders' equity  to determine the total common stockholders' equity. The preferred stockholders' equity is the call  price for the preferred stock plus any cumulative dividends in arrears. The par value is used if the  preferred stock does not have a call price. Using Grandpa's Hook Rug, Inc. balance sheet  information, the book value is: The $1,000,000 deducted from total stockholders' equity represents the par value of the preferred 
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Unformatted text preview: stock as the preferred stock is not callable. There was no common stock activity during the year. The book value of common stock is rarely identical to the market value. If the market value of asset is substantially different from their respective book values, then the book value per share measure loses most of its relevance....
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This note was uploaded on 11/15/2011 for the course ACCT 2310 taught by Professor Staff during the Spring '09 term at Texas State.

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