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The shareholders’ equity section of Pembina Valley Manufacturing Limited’s balance sheet at December 31, 2016 is shown below.
Note: There is $30 of dividends in arrears on the preferred shares. The liquidation value of preferred shares is $300.
Required:
- Calculate the book value per share of
- the preferred shares; and
- the common shares.
- Assume that the common shares were split 2 for 1 on January 2, 2017 and that there was no change in any other account at that time. Calculate the new book value of common shares immediately following the share split.
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