A Firm Just Issued 15,000 New Shares of Stock with a Market

question 76

Multiple Choice

A firm just issued 15,000 new shares of stock with a market price of $14 per share and par value of $2 per share.Which one of these correctly states the resulting change in the equity accounts?

• A) Capital surplus will increase by $180,000.
• B) Retained earnings will decrease by $210,000.
• C) Common stock will increase by $15,000.
• D) Common stock will increase by $210,000.

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Definitions:

Defined Contribution Plan

A type of retirement plan where employers, employees, or both make regular contributions, and the final benefits received depend on the investment's performance.

Standard Deviation

A measure of the dispersion or variability around the mean of a set of data points, often used to quantify risk in finance.

Defined Contribution Plan

A retirement plan where the amount of the retirement benefits is determined by the contributions to the plan and the performance of the investments.