Home > Corporate Finance, Financial Accounting, Financial Statement Analysis > Dividend, Book Value, Market Value, Subscribed Shares Calculation

Dividend, Book Value, Market Value, Subscribed Shares Calculation

Balance Sheet of a company:

Balance Sheet of a Business

Assets

Liabilities & Stockholders Equity

Current Assets(Includes Subscribed Receivable 7200000) 31629714 Current liabilities 15387428
Fixed Assets 53856000 long-term liabilities 10258286
Stockholders’ equity 59840000
Total Assets 85485714 Total 85485714

Statement of Shareholders equity:

Shareholders Equity
Preferred Stock
Par Value Rs. 100
Callable at Rs, 102
Authorized Shares 200000
Dividend per Share Rs. 6
12000000
Total Preferred Stock at par 12000000
Common Stock
Par Value Rs. 5
Authorized Shares 5000000
Issued 10000000
Subscribed 4000000
Total Common Stock at Par 14000000
Additional Paid in Capital:
Preferred Stock at premium 360, 000
Common (including subscribed) at premium 30800000
Total Additional Paid in Capital 31160000
Retained Earning 2680000
Total Stockholders Equity 59840000

Calculation from above Statements are;

Total Preferred Share Issued:

Total Preferred Share Issued = Total par value / par value per share

Total Preferred Share Issued = 12000000 / 100

Total Preferred Share Issued = 120000 shares

Annual Dividend Requirement on Outstanding Preferred Stock:

=no share x dividend per share

= 120000 x 6

= Rs. 720000 P/A

Market Value of Preferred Stock:

Market Value= (total per value + additional paid in capital) / shared issued

Market Value= (12000000 + 360000) / 120000

Market Value=103

Common Shares Issued and Subscribed:

= total per value / par value per share

= 14000000 / 5

= 2800000 shares

Average Price per common share received by he business:

=(Total par value + additional paid in capital ) / shares issued and Subscribed

=(14000000 + 30800000 ) / 2800000

= Rs. 16

Common Share Subscribed:

= par value of subscribed shares / par value of share

= 4000000 / 5

= 800000 shares

Amount per common share due from subscriber:

= Subscription receivable / Shares Subscribed

= 7200000 / 800000

= Rs. 9

Total Legal Capital:

=preferred stock + common stock

=12000000 + 14000000

= 26000000

Total paid in Capital:

= Total legal capital + additional paid in capital

= Total legal capital + additional paid in capital

=26000000+ 31160000

=57160000

Book Value per common share:

=Common stock equity / Total common share

=(Total stockholders’ equity – claim of preferred stockholders at callable price) / 2800000

=(59840000 – (common shares x callable price)) / 2800000

=(59840000 – (120000 x 102)) / 2800000

=47600000/280000

=47,600,000/2,800,000

=Rs.17

  1. February 11, 2011 at 12:01 am

    I think this is among the most important information for me. And i’m glad reading your article. But should remark on few general things, The website style is great, the articles is really nice : D. Good job, cheers

  2. February 11, 2011 at 5:06 am

    @Cassandra Thanks

    • smnadir
      March 17, 2011 at 8:01 pm

      kia bat ha ap ki paaaaaaaaaaa geeeeeeeeeeeeeeeeeeeeee. ya to accounting ki terf kub gaya

      • March 18, 2011 at 5:23 pm

        Yar bas chala h gaya. Thanks jani

  3. rushna
    January 22, 2012 at 11:36 am

    why the additional-paid-in capital has not been deducted from common stockholder’s equity? as it is not a part of common stock holder’s earnings. plzzzzzzzzz rpl if anyone have the correct answer

    • Rravian
      February 1, 2012 at 10:38 am

      First of all let me tell you what I could be able to understand form your question , “Paid up capital and common stock or preferred stock are same things as we raise the capital which is done with the help of issuing shares. Then why these two terms have separately stated?”

      The answer is simple and easy to understand. There is a word used “Additional” with paid up capital which means that some thing is adding to the previous stock. In accounting this is compulsory that when we make some changes at first time we have to disclose them so that there could be distinction between the old values and the new one. Additional paid up capital means that we have increased the capital recently so we have to disclose it separately from the previous stock values, common or preferred.

      The question is valid and would be answered in a different way if we erase the word “additional”. In that case additional paid up capital will be added to the previous common or preferred stock accordingly and there will no split as additional paid up capital.

      If still there is any ambiguity then ask without any hesitation.

      Thanks

  4. rushna
    February 6, 2012 at 11:23 am

    i am still confused….i am asking dat when we are calculating book value per share, we have to calculate common stock holder’s equity…. while calculating common stock holder’s equity we are subtracting the value of preferred stock (12000000)
    as it is not a part of common stock holder’ equity but why we are not subtracting the additional paid up capital for preferred stock which is $360000 in the above example?

  5. Rravian
    February 7, 2012 at 7:21 am

    Your question have made me curious, so I have gone through the question very deeply🙂

    Here is complete answer of your question.

    I felt shocked when i found that i was reading “additional paid in capital” as “Additional paid up capital” which was the main cause that the question has not been answered yet.

    Firstly we should understand the term ” additional pain in capital”

    In very simple words premium is called additional paid in capital.

    e.g

    A company issues 1 thousand shares having par value of $10 /share and the investors paid $15 per share – a premium of $5 over par value. Now, the allocation of amount received from this issue will be as; $10,000 ($10*1,000) will be allocated to a share capital or paid-in-capital account where as the excess or premium of $5,000 ($5*1,000 ) will be allocated to the contributed surplus account as additional paid-in-capital.

    In reference to the above question 360,000 is actually premium which has collected on preferred shares and we know that common stock includes capital collected against ordinary shares, premium and undistributed profits or reserves. So, in this sense surplus amount of 360,000 have become a part of shareholders equity or common stock and will not be deducted for the calculation of book value.

    If still there is any question, go for it.🙂

    • rushna
      February 7, 2012 at 11:28 am

      thank u so much for such an explanatory n clear answer. actually i didnt know before that all premiums whether on common stock or on preffered stock are related to common stock holder’s. but its clear to me now
      . wud u be kind enough to tell me that y the premium on prefererd stock is a part of common stock holder’s wealth?

      • Rravian
        February 8, 2012 at 9:07 am

        There is a simple point in belonging of premium on preferred shared to the common stock equity which is;

        Preferred stock holders actually enjoy the facility of preference for dividend which is fixed to some percentage of par value of shares. There will be dividend for preferred shareholders whatever the situation is, dividend is declared or not, they will be provided with it. Furthermore, they can only enjoy the feature of callable price in relation to their shares.

        In the case of common stockholders, as they are not dominant to the dividends, so they have given an edge in relation to the premiums and other reserves. Whatever the source of premium is, common or preference, all the “additional paid in capitals” belongs to common stockholders. Because the only thing the preferred stockholders can enjoy is the preference on dividend, remaining belongs to common stock holders.

        If still confused, ask without diffidence.

        • rushna
          February 8, 2012 at 9:13 am

          thank u so much sir…..now it is crystal clear to me……

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