Determine the maximum price you would pay for a share

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Reference no: EM13838955

Determine the maximum price you would pay for a share of common stock in Roscovis if you have the following investment constraints:
	Maximum Price/Earnings Ratio	15 X
	Maximum Multiple of Book Value	3 X
	Minimum Dividend Yield	3%
	Preferred stock, $100 par value, callable at 105, 4%, cumulative, 200,000 shares authorized, 50,000 shares issued and outstanding	$ 5,000,000
	Common stock, $2 par value, 1,000,000 shares authorized, 400,000 shares issued and outstanding	800,000	$ 5,800,000
	Additional paid-in capital:
	Paid-in capital in excess of par -- preferred stock	$ 50,000
	Paid-in capital in excess of par -- common stock	4,000,000	4,050,000
	Total paid-in capital			$ 9,850,000
	Retained earnings			7,400,000
	Total stockholders' equity			$ 17,250,000

Reference no: EM13838955

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