SIE practice questionhardBook Value
A company has $100 million in assets, $40 million in liabilities, and 10 million common shares outstanding. Preferred stockholders have a $10 million par value claim. What is book value per common share?
- A$5✓ Correct answer
- B$10
- C$6
- D$4
Explanation
Why A — $5
Book value per common share subtracts liabilities and the preferred claim before dividing by common shares: ($100M - $40M - $10M) / 10M = $5 per common share.
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