Quiz 11: Stockholders Equity: Paid-In Capital

Business

Prepare the stockholder's section of the balance sheet of O Co.: The stockholder's section of the balance sheet included the common capital (par value of outstanding shares), share premium (value paid in excess of par value of outstanding shares) and the balance of retained earnings. In the present case, the par value of share is $8 and the value per share is $13. Hence, $5 ($13 - $8) is the excess amount paid over par value. It is given that the outstanding shares are 10,000 and have a retained earnings balance of $75,000. Based on the above information, prepare the stockholder's section of the balance sheet of O Co. as below: img img Hence, the shareholder's equity is $205,000.

There is no answer for this question

a. Different issues of market price On the basis of the data market price decline as per share value decline from $100 to reduced to $80 per share. Dividends per shares increases from 5% to 10% Market value is up and down from the book value. Variability in the market value directly affects the financial positions of the stockholder not the corporations. b. Common stock Under this situation market price of the shares will be more, as selling at $40 per shares and the dividends will be 50% of the par value and the 6.25% of selling value. Market value • Once the shares issued than it will be sold from one investor to the investor. • It is price which is prevailing in the market. • Market value is different from one aspect to another. • Market value is different from the par value and the book value per shares. • As the market price is high it help to the investor • So, market value plays an important role in taking various decisions. c. Convertible preferred stock As per the situation market price decline as 7% is lower than expected although selling price is at $95 per shares compared to $100 per shares of convertible preferred stock. • As the market value increases, it will help to the corporations also. • As the creditors are fully satisfied with the working of the corporations and they continue with the corporations. • Suppliers also satisfied with the operations of the corporations. • Investors and the creditors are fully satisfied and continue with the corporations.

There is no answer for this question

There is no answer for this question

There is no answer for this question