The Following Information Is from the Balance Sheet of Tudor

question 62

Multiple Choice

The following information is from the balance sheet of Tudor Corporation as of December 31, 2014.
$\begin{array}{|l|r|r|}\hline \text { Preferred stock, } \$ 100 \text { par } & \quad\quad& \$ 500,000 \\\hline \text { Paid-in capital in excess of par-preferred } && 35,000 \\\hline \text { Common stock, } \$ 1 \text { par }& & 190,000 \\\hline \text { Paid-in capital in excess of par-common } & & 380,000 \\\hline \text { Retained earnings } & & 131,500 \\\hline \text { Total stockholders' equity } && \$ 1,236,500\\\hline \end{array}$

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What is the average issue price of the preferred stock shares?

• A) $107
• B) $100
• C) $176
• D) $5,000

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Definitions:

Cost Plus Pricing

A pricing strategy where a fixed percentage or amount is added to the cost of producing a product to determine its sale price.

Parallel Market

An unofficial market where goods are traded outside of the official channels, often at a different price point.

Dumping Strategy

A practice where companies sell products in foreign markets at prices lower than those in their domestic market, often to increase market share or unload surplus inventory.

Profit Margin

The ratio of a company's net income divided by its revenue, indicating how much profit the company makes for each dollar of sales.