A prospective investor has hired you to develop a worksheet that will compute the book value per share on each class of stock of various companies. Your worksheet should include a Data Section. One of the companies the investor is currently interested in is Hawk Enterprises, which has the following capital structure: Preferred 8% stock, $100 par $1,575,000 Common Stock $30 par 2,025,000 Premium on common stock 260,000 Retained earnings 525,000 Preferred stock has a prior claim to assets on liquidation to the extent of 105% of par. Book value per share, Hawk Enterprises: Common stock $40.46 You are to find the; Shares of stock: Preferred and Common Book value per share: Preferred and Common

To calculate the book value per share for each class of stock, we need to first determine the number of shares for each class and then divide the total book value by the number of shares.

Let's start with calculating the number of shares:

1. Preferred Stock:
The par value of preferred stock is given as $100, and the total value is $1,575,000. We can calculate the number of shares using the formula:

Number of shares = Total value / Par value
Number of shares = $1,575,000 / $100

Calculate the above division, and you will get the number of preferred shares.

2. Common Stock:
The par value of common stock is given as $30, and the total value is not provided explicitly. However, we can infer the total value by subtracting the premium on common stock and retained earnings from the book value per share of common stock.

Total value = Book value per share of common stock * Number of common shares
Total value = $40.46 * 2,025,000

Calculate the above multiplication, and you will get the total value of common stock.

Next, we can calculate the book value per share for each class:

1. Book Value per Share - Preferred Stock:
Preferred stock has a prior claim to assets on liquidation to the extent of 105% of par. This means that in case of liquidation, preferred stockholders will receive 105% of the par value per share before any distribution is made to common stockholders. Hence, we need to adjust the par value of preferred shares:

Adjusted par value = Par value * 105%
Adjusted par value = $100 * 105% or 1.05

Now, divide the adjusted par value by the number of preferred shares you calculated earlier to get the book value per share for preferred stock.

2. Book Value per Share - Common Stock:
Divide the total value of common stock (calculated earlier) by the number of common shares to get the book value per share for common stock.

Compute the above calculations, and you will obtain the book value per share for both preferred and common stock of Hawk Enterprises.