Divac Company has developed a statement of stockholders equity for the year 2014 as follows: Divacs preferred

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Divac Company has developed a statement of stockholders€™ equity for the year 2014 as follows:

Paid-In Paid-In Capital- Common Capital– Preferred Common Retained Earnings Stock Preferred Stock Balance, Jan. 1 Stoc

Divac€™s preferred stock is $100 par, 8% stock. If the stock is liquidated or redeemed, stockholders are entitled to $120 per share. There are no dividends in arrears on the stock. The common stock has a par value of $5 per share.


Required
1. Determine the dividend payout ratio for the common stock.
2. Determine the book value per share of Divac€™s common stock.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...
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