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If total assets equal $500 million, current liabilities equal $100 million, long-term liabilities equal $200 million and retained earnings equal $50 million then the book value sum of common stock and preferred stock is:



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Shenshengde

Answer:

The book value of common stock and preferred stock can be calculated using the formula:

Book Value of Common Stock + Book Value of Preferred Stock = Total Assets - Total Liabilities

Given:

Total Assets = $\$ 500$ million

Current Liabilities = $\$ 100$ million

Long-term Liabilities = $\$ 200$ million

Retained Earnings = $\$ 50$ million

Total Liabilities = Current Liabilities + Long-term Liabilities = $\$ 100$ million + $\$ 200$ million = $\$ 300$ million

Book Value of Common Stock + Book Value of Preferred Stock = $\$ 500$ million - $\$ 300$ million = $\$ 200$ million

Therefore, the book value sum of common stock and preferred stock is $\$ 200$ million.

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