Question

The Buzz Tool Company issued 1,000 shares of common stock. If the total value of this was $50,000,what's the par value of each share.

Answer 1

Answer: par value is $50.00

Explanation:

$50,000.00 ÷ 1,000

= $50.00

Answer 2

$50.

Explanation:

The formula for the stocks is...

Par value of preferred stock = (Number of issued shares) * (par value per share)

So, we can say that...

Par value per share = par value of preferred stock / number of issued shares.

The par value of the Buzz Tool Company is $50,000. There are 1,000 issued shares. So, each stock would be $50,000 / 1,000 = $50 / 1 = $50.

Hope this helps!