The stockholders equity section of the balance sheet for Quinn Equipment Co. at December 31, 2013, is as follows:
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The market value per share of the common stock is $40, and the market value per share of the preferred stock is $28.
Required:
a. What is the par value per share of the preferred stock?
b. What is the dividend per share on the preferred stock?
c. What was the average issue price per share (price for which the stock was issued) of the common stock?
d. Explain the difference between the par value and the market price of the preferred stock.
e. If Cross declares a 2 for 1 stock split on the common stock, how many shares will be outstanding after the split? What amount will be transferred from the retained earnings account because of the stock split? Theoretically, what will be the market price of the common stock immediately after the stock split?