11.7 Smalley, Inc., has preferred and common stock outstanding as follows: $ 5 preferred stock, 40,000 shares @ $ 100 par value . . .$ 4,000,000 Common stock, 500,000 shares at $ 10 par value . . . 5,000,000 Additional paid- in capital on common stock . . . 800,000 Retained earnings . . . 1,750,000 Calculate the book value on common stock, assuming preferred dividends are cumulative and are currently one year in arrears