The balance sheet caption for common stock is the following:
Common stock without par value, 1,500,000 shares authorized, 600,000 shares issued, and 540,000 shares outstanding - $8,700,000
- Calculate the average price at which the shares were issued.
- If these shares had been assigned a stated value of $1 each, show how the caption here would be different.
- If a cash dividend of $1.20 per share were declared, calculate the total amount of cash that would be paid to stockholders.
- What accounts for the difference between issued shares and outstanding shares?