Examine the following book-value balance sheet for University Products, Inc. The preferred stock currently sells for $10 per share and the common stock for $15 per share. There are 1 million common shares outstanding.

BOOK VALUE BALANCE SHEET (all values in millions)
Assets			Liabilities and Net Worth
Cash and short-term securities	$	2.0	Bonds, coupon = 6%, paid annually (maturity = 10 years, current yield to maturity = 8%)	$	20.0
Accounts receivable		5.0	Preferred stock (par value $15 per share)		3.0
Inventories		9.0	Common stock (par value $0.2)		0.2
Plant and equipment		21.0	Additional paid-in stockholders