When a Company Has Both Common Shares and Preferred Shares

Multiple Choice

When a company has both common shares and preferred shares, the book value per common share is calculated by:

A) dividing total shareholders' equity by the number of common shares outstanding
B) dividing the amount in the common shares account by the number of common shares outstanding
C) dividing total shareholders' equity less preferred equity by the number of common shares outstanding
D) dividing the amount in the common shares account by the sum of the number of common shares and preferred shares outstanding