Stock given as consideration for a business combination is valued at
A)fair market value
B)par value
C)historical cost
D)None of the above

Question

Quizplus · Accepted Answer

When stock is given as consideration for a business combination, it should be valued at the fair market value of the stock at the date of the combination. This is because fair market value reflects the actual value of the stock as determined by market forces, whereas par value and historical cost do not necessarily reflect the current value of the stock.

Stock Given as Consideration for a Business Combination Is Valued