Folsom Corporation’s common stock is currently selling on a stock exchange at $183 per s...

Folsom Corporation’s common stock is currently selling on a stock exchange at $183 per share, and its current balance sheet shows the following stockholders’ equity section.

Required

1. What is the current market value (price) of this corporation’s common stock?

2. What are the par values of the corporation’s preferred stock and its common stock?

3. If no dividends are in arrears, what are the book values per share of the preferred stock and the common

stock?

4. If two years’ preferred dividends are in arrears, what are the book values per share of the preferred

stock and the common stock?

5. If two years’ preferred dividends are in arrears and the preferred stock is callable at $95 per share,

what are the book values per share of the preferred stock and the common stock?

6. If two years’ preferred dividends are in arrears and the board of directors declares cash dividends of

$24,750, what total amount will be paid to the preferred and to the common shareholders? What is

the amount of dividends per share for the common stock?

Analysis Component

7. What are some factors that can contribute to a difference between the book value of common stock

and its market value (price)?