A premium on common stock:
A)Is the amount paid in excess of par by purchasers of newly issued stock.
B)Is the difference between par value and issue price when the amount paid is below par.
C)Represents profit from issuing stock.
D)Represents capital gain on sale of stock.
E)Is prohibited in most states.

Question

Quizplus · Accepted Answer

A premium on common stock represents the amount paid in excess of par by purchasers of newly issued stock.

A Premium on Common Stock