Down River Express Has 5,000 Shares of Stock Outstanding with a Par

question 368

Multiple Choice

Down River Express has 5,000 shares of stock outstanding with a par value of $1.00 per share. The current market value of the firm is $390,000. The balance sheet shows a paid in surplus account
Value of $122,000 and retained earnings of $216,000. The company just announced a 2-for-1 stock
Split. What will the paid in surplus account balance be after the split?

• A) $61,000
• B) $112,000
• C) $122,000
• D) $183,000
• E) $244,000

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Definitions:

Demand Frequency

The rate at which goods or services are requested or required by customers.

Expected Demand

The anticipated quantity of a product or service that consumers will purchase in a future period under given conditions.

Monte Carlo Simulation

A computational algorithm that uses repeated random sampling to obtain numerical results, often used to assess risk and uncertainty in business and engineering models.

Cumulative Probability

The probability that a random variable takes on a value less than or equal to a specific value, used to understand the likelihood of different outcomes.