Issuing shares of a company


Question 1: Suppose that the company issues 10,000 shares at $4 a share. Which of the figures below would change?

Question 2: What would happen to the company's books if instead it bought back 1,000 shares at $4 per share?

Common stock ($1 par value) $60,000
Additional paid-in capital 10,000
Retained earnings 30,000 = 100,000 Common equity

Common Equity 100,000
Treasury Stock (2,000 shares) 5,000 = 95,000 Net Common equity

Solution Preview :

Prepared by a verified Expert
Finance Basics: Issuing shares of a company
Reference No:- TGS02045285

Now Priced at $20 (50% Discount)

Recommended (93%)

Rated (4.5/5)