Problem 12-6

How do I compute total market value of common stock; compute book value of common and preferred stock (L.O. 6)

The common stock of Lang Corporation is selling on a stock exchange for $105 per share. The stockholders' equity of the corporation at December 31, 2019, is as follows:

Stockholders' equity:

Paid-in capital:

Preferred stock6% cumulative, $120 par value, $120 liquidation value, 3,000 shares authorized, issued, and outstanding

$360,000

Common stock$72 par value, 30,000 shares authorized, issued and outstanding

2,160,000

Total paid-in capital

$2,520,000

Retained earnings

354,000

Total stockholders' equity

$2,874,000

Assuming that in liquidation the preferred stock is entitled to par value plus cumulative unpaid dividends.

a.How do I find what is the total market value of all of the corporation's common stock?

b.If all dividends have been paid on the preferred stock as of December 31, 2019, how do I find what are the book values of the preferred stock and the common stock?

c.If two years' dividends were due on the preferred stock as of December 31, 2019, how do I find what are the book values of the preferred stock and common stock?