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You are considering an investment in Roxie's Bed & Breakfast Corp. During the last year, the firm's income statement listed an addition to retained earnings of $8.40 million and common stock dividends of $2.80 million. Roxie's year-end balance sheet shows common stockholders' equity of $41.6 million with 16 million shares of common stock outstanding. The common stock's market price per share was $9.60. What is Roxie's Bed & Breakfast's book value per share

Answer :

Ritmeks

Answer:

$2.6 per share

Explanation:

Roxie bed and breakfast corporation had a retained earnings of $8.40 million

The common stock dividend is $2.80 million

The year end balance sheet shows a common stock equity of $41.6 million and common stock outstanding of 16 million

Therefore Roxie's bread and breakfast book value per share can be calculated as follows

= common stockholders equity / common stock outstanding

= 41,600,000/16,000,000

= $2.6 per share

Hence Roxie's bread and breakfast book value is $2.6 per share

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