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The balance sheet of Oriental Rug Company reported the following: Cumulative preferred shares, $0.06, outstanding 6,000 shares $10,000 Common shareholders equity: 8,000 shares issued and
The balance sheet of Oriental Rug Company reported the following:
Cumulative preferred shares, $0.06, outstanding 6,000 shares $10,000
Common shareholders equity: 8,000 shares issued and outstanding 87,200
Total shareholders equity $97,200
- Compute the book value per share for the common shares, assuming all preferred dividends are full paid up (none in arrears).
- Compute the book value per share of the common shares, assuming that three years preferred dividends, including the current year, are in arrears.
- Oriental Rugs common shares recently traded at a market price of $7.75 per share. Does this mean that Oriental Rugs shares are a good buy at $7.75?
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