The Uptowner Has 6,000 Shares of Stock Outstanding with a Par

question 80

Multiple Choice

The Uptowner has 6,000 shares of stock outstanding with a par value of $1 per share and a market value of $12 per share.The balance sheet shows $6,000 in the common stock account,$58,000 in the capital in excess of par value account,and $32,500 in the retained earnings account.The firm just announced a 55 percent (large) stock dividend.What is the value of the common stock account after the dividend?

• A)$7,000
• B)$8,500
• C)$9,300
• D)$10,500
• E)$14,000

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Definitions:

Short-Term Debt

Refers to financial obligations that are due for repayment within one year.

Debt/Equity Ratio

The metric that specifies how a company allocates equity and debt in the financing of its assets.

Long-Term Debt Ratio

A ratio that compares the amount of long-term debt a company has to its total assets, indicating how much of the company's assets are financed with debt.

Total Debt

The sum of all liabilities, both short and long term, that a company owes to external parties.