Question 8 part a: A company has $200,000 of total assets, $160,000 of total liabilities, and $40,000 of total stockholders' equity, including $15,000 of contributed capital from preferred stock. Its net income is $10,000, and it pays $2,500 in preferred dividends, and it has 5,000 common shares and 1,000 preferred shares outstanding. Its book value per share would be

a		$4.25
b		$5.00
c		$6.75
d		$8.00

b: Banana Corporation has 200,000 outstanding shares for the entire year; 50,000 are owned by preferred stockholders, and the rest are all common stocks. The company reported a net income of $460,000 and declared dividends of $15,000 and $10,000 on the common stock and the preferred stock, respectively. Banana's earnings per share for the year were ____.

a		$2.25
b		$2.90
c		$3.00
d		$3.06
e		$4.00

c: If a company has $200,000 of total assets, $160,000 of total liabilities, and $40,000 of total stockholders' equity, which includes $15,000 of contributed capital from preferred stock, the return on common equity, if its net income is $10,000 and it pays $2,500 in preferred dividends, would be ____.

a		15%
b		25%
c		30%
d		40%
e		66.67%