The common stock of Bishop Corporation is selling on a stock exchange for $ 90 per share. The stockholders' equity of the corporation at December 31, 20x9 consists of:
Stockholders' equity:
Paid-in capital:
Preferred stock—9% cumulative,
$120 par value, $120 liquidation value,
3,000 shares authorized, issued, and outstanding $360,000
Common stock—$72 par value, 30,000 shares authorized, issued and outstanding 2,160,000
Total paid-in capital 2,520,000
Retained earnings 354,000
Total stockholders' equity 2,874,000
Assume that in liquidation the preferred stock is entitled to par value plus cumulative unpaid dividends.
a. What is the total market value of all of the corporation's common stock?
b. If all dividends have been paid on the preferred stock as of December 31, 20x9, what are the book values of the preferred stock and the common stock?
c. If two years' dividends were due on the preferred stock as of December 31, 20x9, what are the book values of the preferred stock and common stock?