If the offering price of a stock is $2 and its capital in excess of par is $3,the par value of the stock is:

Question

Quizplus · Accepted Answer

The par value of a stock is calculated by subtracting the capital in excess of par from the offering price. Therefore, $2 (offering price) - $3 (capital in excess of par) = -$1. However, since the capital in excess of par is actually added to the par value to get the offering price, the correct calculation should be $2 (offering price) - (-$3) (capital in excess of par), which equals $5. This means the par value is $5.00.

If the Offering Price of a Stock Is $2 and Its