Question

1. Dee’s Corporation is a publicly owned company with 2009 Net Income of $375,000. Use the information taken from a recent balance sheet to answer the question that follow.

   Stockholder’s Equity
   Convertible $0.95 preferred stock, $2.75 par value      7,000,000 shares authorized; 250,000 shares issued and outstanding	$687,500
   Common stock, par value $0.75; 9,000,000 shares authorized	$337,500
   Contributed Capital in excess of par	$562,500
   Retained earnings	$75,000
   Total Stockholder’s Equity	$1,662,500

   How many shares of common stock have been issued?

   		250,000 shares of common stock
   		7,000,000 shares of common stock
   		9,000,000 shares of common stock
   		450,000 shares of common stock

2. What is the total amount of annual dividends that have been paid to preferred stockholders?

   		$237,500
   		$687,500
   		$6,650,000
   		$19,250,000

3. What is the total amount of paid-in capital?

   		$1,662,500
   		$687,500
   		$1,587,500
   		$1,025,000

4. What is the market price per share of common stock?

   		$0.75
   		$0.95
   		$2.75
   		$2.00

5. What is the book value per share of common stock?

   		$2.17
   		$2.00
   		$2.75
   		$0.95

Answer 1

1) Common Stock issued = 337500/.75 = 450000 Shares

So answer is d) 450000 Shares of common Stock

2) Annual preferred dividend = 250000*.95 = 237500

So answer is a) $237500

3) Total amount of paid in capital = 687500+337500+562500 = $1587500

So answer is c) $1587500