Initial sale price of common stock Hudson-Perry Recordings Inc has one issue of preferred stock and one issue of common stock outstanding. Given their stockholders' equity account that follows, determine the original price per share at which the firm sold its single issue of common stock. Shareholer's equity (in $000) Preferred stock 225Common stock ($0.1 par, 1,400,000 shares outstanding) 140Paid in capital in excess of par on common stock 19,460Retained earning 1,800Total 21,625

Question

Ryker Watts

Business

23 September, 22:05

Initial sale price of common stock Hudson-Perry Recordings Inc has one issue of preferred stock and one issue of common stock outstanding. Given their stockholders' equity account that follows, determine the original price per share at which the firm sold its single issue of common stock. Shareholer's equity (in $000) Preferred stock 225Common stock ($0.1 par, 1,400,000 shares outstanding) 140Paid in capital in excess of par on common stock 19,460Retained earning 1,800Total 21,625

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Answers (1)

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Larry Lynn · Answer 1

Original price per share - $14

Explanation:

Information:

Common stock value = $140,000 Paid-in capital in excess of par on common stock = $19,460,000 Number of shares issued = 1,400,000 shares

Original issue price = (Common stock value + Paid-in capital in excess of par on common stock) / Number of shares issued

Original issue price = (140,000+19,460,000) / 1,400,000

Original issue price = $14 / share