Final answer:
The par value of Nash's common stock is $5 per share, which is calculated by dividing the change in par value of the stock by the number of new shares issued in the acquisition.
Step-by-step explanation:
To determine the par value of Nash's common stock, we need to analyze the change in par value and paid-in capital before and after the acquisition. Initially, the par value of all common stock outstanding was $750,000. After the acquisition, the par value increased to $840,000. This means that new shares were issued for the acquisition with a total par value of $840,000 - $750,000, which equals $90,000.
The additional paid-in capital increased from $200,000 before the acquisition to $560,000 after the acquisition, an increase of $360,000. This means that for the par value increase of $90,000, the company received an additional $360,000 in paid-in capital beyond the par value.
To find the par value per share, we calculate the number of new shares issued by dividing the increase in par value by the par value per share. That is, $90,000 divided by the number of new shares. We also know that the market value of Nash's shares was $25 at the time of the exchange. To adhere to the provided numeric options A through D, we look for a par value per share that will lead to a whole number when $90,000 is divided by it.
By testing the options, we find that option B) $5 is correct since $90,000 divided by $5 gives us 18,000 shares, which multiplied by the market value of $25 per share results in $450,000 of market value, and when added to $360,000 of additional paid-in capital equals $810,000, the total value of shares issued.