A company is about to issue new shares of stock.If the par value per share is $4.00, the price of the new shares will most likely be:
A)Less than $4.00.
B)Equal to $4.00.
C)Greater than $4.00.
D)Equal to the capital surplus.

Question

Quizplus · Accepted Answer

The price of the new shares will most likely be greater than the par value per share of $4.00, as the market value of the shares may be higher due to factors such as demand, supply, and company performance. The difference between the market value and the par value per share is known as the capital surplus. Therefore, D is not the correct answer as it does not address the price of the new shares. A and B are not the correct answers as they assume that the market value of the shares will be the same as the par value, which is unlikely to be the case in most situations.

A Company Is About to Issue New Shares of Stock