6-11. The balance sheet of the B & B Company, as of the end of its current fiscal year, is as follows: Assets Liabilities and Net Worth Current Assets: Cash Current Liabilities: $ 250,000. Receivables Current installments on 1,600,000. long-term debt payable $ 50,000. Inventories 1,950,000. Accounts payable 100,000. Short-term bank loan 250,000. Federal income tax payable 200,000. Fixed Assets: Other Liabilities: Plant and equipment, 6.0% bonds due in 20 years* 600,000. net after depreciation 1,700,000. Net Worth: Preferred stock (100,000 shares)+ 800,000. Common stock (1,000,000 shares outstanding) 3,000,000. Surplus and retained earnings 500,000. Total Assets $5,500,000. Total Liabilities and Net Worth $5,500,000. *Bonds are each $1,000 face value, mature in 20 more years, bear interest at the rate of 6% per year, and interest is paid quarterly. +Preferred stock pays a dividend of $0.47 per share annually. Cash dividends have averaged $0.25 per share of common stock each year for the last 4 years. Earnings for the last 12 months were $825,000 after income taxes. The com- pany's effective tax rate is 56%. Stock is traded on the American Exchange (Chicago), and the price for the company's common stock has ranged between $5.50 and $7.25 per share in the last 6 months, while the preferred stock price has averaged $9.05 per share in the same period