Question

A firm has $2,000,000 in its common stock account and $20,000,000 in its paid-in capital account. The firm issued 500,000 shares of common stock. What is the par value of the common stock? Select one: a. $40 per share b. $44 per share c. $4 per share d. $3 per share e. None of the above

Answer 1

c. $4 per share

Step-by-step explanation:

In order to calculate the amount of money that the per value of the common stock you need to divide the amount of money that is located in the common stock account and divide it by the number of shares of common stock that the company issued, in this case it would be 2,000,000/500,000=4

SO the per value of the common stock will be $4 dollars per share.

Answer 2

Answer: $4 per share

Explanation:

The par value of the common stock is given as:

=
`(common stock account)/(shares of common stock)`

=
`(2000000)/(500000)`

= $4 per share

Here;

Common stock denotes the shares entitling their holder to dividends that vary in amount .