When a company issues its stock, the equity increase is equal to the number of shares sold multiplied by the market price of the stock on the issue date.

Question

Quizplus · Accepted Answer

Common stock increases by the number of shares sold times the par value of stock. Additional paid-in capital increases by the number of shares sold times the difference between market price and par value. Cash increases for the total market value of the issued shares.

When a Company Issues Its Stock, the Equity Increase Is