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

Answer 1

the par value of the common stock is $4 per share

Step-by-step explanation:

The computation of the par value of the common stock is given below;

The part value of the common stock is

= Common stock account ÷ shares of common stock

= $2,000,000 ÷ 500,000 shares

= $4 per share.

Hence, the par value of the common stock is $4 per share