The Par Value of Common Stock of a Firm Is

question 12

Multiple Choice

The par value of common stock of a firm is $15 per share. Based on this information, determine the true statement.

• A) If the share is purchased for $8, then the firm has to pay $7 per share to the stockholder, at the time of liquidation.
• B) If the share is purchased for $20, then the firm has to pay an interest of $5 per share.
• C) The stockholder has to pay $15 per share to the firm every year.
• D) The firm pays a fixed dividend of $15 every year.
• E) If the share is purchased for $10, then the stockholder has to pay $5, in case of bankruptcy.

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