189k views
2 votes
Given the equity portion of a firm's balance sheets below, determine the average price per share at which new shares were sold by the firm in 2019.

2018 2019
Common Stock ($0.40 par) $620,600 $830,200
Capital Surplus $9,025,000 $13,726,000
Retained Earnings $17,400,000 $19,100,600
No answer text provided.
$12.22 per share
$9.37 per share
$12.62 per share
$8.97 per share

User JD Conley
by
8.1k points

1 Answer

3 votes

Answer:

$9.37 per share

Step-by-step explanation:

The computation of the average price per share is shown below:

Common stock in the year 2019 $830,200

Less Common stock in the year 2018 $620,600

Rise in common stock $209,600

Divided by Par value per share $0.40

Number of new common shares sold 524,000

Now

Increase in capital surplus [$13,726,000 - $9,025,000 ] $4,701,000

Add: Increase in common stock $209,600

Total proceeds from sale of new shares $4,910,600

Divided by Number of new common shares sold 524,000

Average price per share 9.37

User Izb
by
8.5k points
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

9.4m questions

12.2m answers

Categories