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 $20 per share.

BOOK VALUE BALANCE SHEET (all values in millions)
Assets			Liabilities and Net Worth
Cash and short-term securities	$	2.0	Bonds, coupon = 5%, paid annually (maturity = 10 years, current yield to maturity = 6%)	$	10.0
Accounts receivable		6.0	Preferred stock (par value $10 per share)		2.0
Inventories		10.0	Common stock (par value $0.2)		0.1
Plant and equipment		23.0	Additional paid-in stockholders