Final answer:
The fair value of the common stock is $4,040,000.
Step-by-step explanation:
To calculate the fair value of the common stock, we need to determine the total value of the cash paid and the value of the shares issued. In this case, Arturo Company pays $4,000,000 cash and issues 20,000 shares of its $2 par value common stock.
The value of the cash paid is $4,000,000.
The value of the shares issued can be found by multiplying the number of shares (20,000) by the par value ($2), which equals $40,000.
Therefore, the fair value of the common stock is the sum of the cash paid and the value of the shares issued, which equals $4,000,000 + $40,000 = $4,040,000.