Reference no: EM132945428

Miami Heat Inc. began operations in January 2018, and reported the following results for each of its three  years of operations.

2018 net loss-P 300,000;

2019 net loss-P 30,000;

2020 Profit-P 3,950,000.

At December 31, 2020, the company's capital accounts were as follows: P5 Preference Shares, P 100 par, 100,000 shares authorized, 60,000 shares issued and outstanding  Ordinary Shares, P 10 par, 1,000,000 shares authorized, 800,000 shares issued and outstanding Miami Heat Inc. has never paid a cash or share capital dividend and there has been no change in the capital accounts since its operations began. Assume the preference shares are cumulative and upon corporate liquidation, shares are preferred as to assets up to par.

Problem 1: What is the book value per share of the preference shares on December 31, 2020?