If 100 Shares of $50 Par Value Stock Were Issued

question 12

Multiple Choice

If 100 shares of $50 par value stock were issued at $75 per share,how much would constitute capital surplus?

• A) $750
• B) $7,500
• C) $2,500
• D) $5,000

Distinguish between market value and book value and their implications for investment.

Understand the relevance of price-to-sales ratios in different phases of the industry life cycle.

Interpret the market consensus value of the required return on a stock.

Analyze the impact of dividend policy changes on stock valuation and investor returns.

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Definitions:

Total Capacitive Reactance

The overall opposition that a circuit presents to the flow of alternating current (AC) due to the capacitance in the circuit, measured in ohms.

Total Resistance

Refers to the cumulative resistance within an electric circuit, affecting the overall current flow.

Series RC

A circuit configuration consisting of a resistor (R) and capacitor (C) connected end-to-end or in series with each other, affecting the circuit's overall impedance.

Voltage Drop

The reduction in voltage across components in an electrical circuit, caused by the impedance or resistance of the components.