The Difference Between the Issue Price of the Stock and the Par

question 59

Multiple Choice

The difference between the issue price of the stock and the par value of the stock is:

• A) market value.
• B) par value.
• C) additional paid-in capital.
• D) preferred stock.

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Definitions:

Equity Method

An accounting technique used to record an investor's proportional share of an associate company's net income or loss on its financial statements.

Purchase Price

The total cost that is paid to acquire an asset or service, often including additional fees and taxes beyond the sticker price.

Equity Method

An accounting technique used to record investments where the investor has significant influence but does not control the investee.

Net Income

The remaining earnings of a company after subtracting total expenses and taxes from its gross revenue.