Question - Smalley, Inc., has preferred and common stock outstanding as follows:
$5 preferred stock, 40,000 shares @ $100 par value.................$4,000,000
Common stock, 500,000 shares at $10 par value....................... 5,000,000
Additional paid-in capital on common stock................................ 800,000
Retained earnings....................................................................... 1,750,000
Calculate the book value on common stock, assuming preferred dividends are cumulative and are currently one year in arrears.