Max buys shares of newly issued Z Corp.stock for $30 per share and pays $1,000 cash, a car worth $2,000, and a promissory note for $3,000.Under traditional corporate law, how many shares of stock could validly be sold?

Question

Quizplus · Accepted Answer

The total value of the consideration paid is $30 + $2,000 + $3,000 = $5,030. Dividing this by the share price of $30 gives 167.67 shares. Under traditional corporate law, only whole shares can be issued, so the maximum number of shares that could validly be sold is 167.

Max Buys Shares of Newly Issued Z Corp