Mega Computer's financial statements show 1000 shares of common stock with a par value of $10 000, retained earnings of $20 000, additional paid in capital of $10 000, and long-term debt of $30 000. What is the market value of a share of Mega's stock?
A) $70.00
B) $20.00
C) $40.00
D) $30.00
E) It is not possible to tell from the information given.

Question

Quizplus · Accepted Answer

The market value of a share of stock cannot be determined from the financial statement figures provided (par value, retained earnings, additional paid-in capital, and long-term debt) as these figures do not directly relate to the current market price of a share. Market value is determined by the stock market based on supply and demand, investor perceptions, and other external factors.

Mega Computer's Financial Statements Show 1000 Shares of Common Stock