Hoyt Corp.’s current balance sheet reports the following stockholders’ equity:


5% cumulative preferred stock, par value $100 per share; 2,500 shares issued and outstanding


Common stock, par value $3.50 per share; 100,000 shares issued and outstanding


Additional paid-in capital in excess of par value of common stock


Retained earnings


Dividends in arrears on the preferred stock amount to $25,000. If Hoyt were to be liquidated, the preferred stockholders would receive par value plus a premium of $50,000. The book value per share of common stock is

  1. $7.75
  2. $7.50
  3. $7.25
  4. $7.00