Which of the following is/are true about amounts received from shareholders for the firm's shares when the firm first issued them?
A)The firm assigns the par value of a share of stock at an amount it chooses.
B)Par values are typically small, often $1 or less per share.
C)Par values are rarely equal the amounts the firm receives when it issues the shares.
D)The sum of the par value amount and the additional paid-in capital amount is the total amount received from shareholders.
E)All of these answers are true.

Question

Quizplus · Accepted Answer

All the statements provided are true regarding the amounts received from shareholders for the firm's shares when the firm first issued them. The firm does choose the par value of a share, which is typically a small amount, often $1 or less. The amount received from issuing shares usually exceeds the par value, with the excess recorded as additional paid-in capital. The total amount received is indeed the sum of the par value and the additional paid-in capital.

Which of the Following Is/are True About Amounts Received from Shareholders