Reference no: EM131829183

Question - Smalley, Inc., has preferred and common stock outstanding as follows:

$5 preferred stock, 40,000 shares @ $100 par value.................$4,000,000

Common stock, 500,000 shares at $10 par value....................... 5,000,000

Additional paid-in capital on common stock................................ 800,000

Retained earnings....................................................................... 1,750,000

Calculate the book value on common stock, assuming preferred dividends are cumulative and are currently one year in arrears.