The balance sheet of Eclectic Rug Company reported the following:
Redeemable preferred stock, 10%, $30 par value,
redemption value $25,000; outstanding 700 shares............ $ 21,000
Common stockholders equity:
10,000 shares issued and outstanding................................ 100,000
Total stockholders equity.................................................... $121,000

Requirements
1. Compute the book value per share for the common stock, assuming all preferred dividends are fully paid up (none in arrears).
2. Compute the book value per share of the common stock, assuming that three years cumulative preferred dividends, including the current year, are in arrears.
3. Eclectic Rugs common stock recently traded at a market price of $7.10 per share. Does this mean that Eclectic Rugs stock is a good buy at $7.10?