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16 April, 09:04

A corporation has issued 50,000,000 shares of common stock at $2 par. The corporation has 10,000,000 shares of Treasury Stock on its books. The aggregate value of the outstanding shares is:

A. $20,000,000

B. $40,000,000

C. $80,000,000

D. $100,000,000

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  1. 16 April, 10:23
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    C. $80,000,000

    Explanation:

    The issued shares are those which are held by the shareholder of the company and Treasury shares and those share which are bought back by the company. So it is not reported in the outstanding shares. Outstanding share are the net of issued share and Treasury share.

    Issued Share = 50,000,000 shares

    Treasury shares = 10,000,000 shares

    Outstanding shares = 50,000,000 - 10,000,000 = 40,000,000

    Stock par value = $2

    Value of outstanding shares = 40,000,000 shares x $2 = $80,000,000
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