Wicoms financial statements as of december 31 2006preferred, Ask an Expert

Accounting

Wicom's financial statements as of December 31, 2006.

Preferred stock- 100,000 shares authorized, issued and outstanding; $10 par value; $11 liquidation value $1,000,000.

Common Stock, par value $0.50. Authorized 1,000,000 shares; issued- 460,000, $230,000.

Capital contributed in excess of par value $4,750,000.

Retained earning $(500,000)

Treasury stock, at cost (50,000 shares), $(500,000)

Total stock holders? equity $4,980,000.

a. Calculate book value per share of common stock.

b. Assume that the company also had $1,000,000 worth of convertible bonds. The bonds are convertible at one $1,000 bond into 150 shares of stock. There are also stock options to buy 120,000 shares at a price of $5 per share. The stock is currently trading at $30 per share. Recalculate your answer to part a) taking into account dilutive effects of the above.

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Financial Accounting, Accounting

Category:- Financial Accounting
Reference No.:- M91604573

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