The mining co. has 110 shares of stock outstanding The current market value of t

Question

The mining co. has 110 shares of stock outstanding The current market value of the firm is $5.5 million. the company has retained earnings of $1.8 million, paid in surplus of $2.2 million, and a common stock account value of $11 million. The company is planning a 5 for 1 stock split. What will the par value
per share be after the split ?
a) $0.15 b)$0.20 c)$1.00 d)$2.50 e) $5.00
Please show the work and can you explain to me the difference between the market value per shre adn the par value per share ??

Explanation / Answer

The mining co. has 110 shares of stock outstanding The current market value of the firm is $5.5 million. the company has retained earnings of $1.8 million, paid in surplus of $2.2 million, and a common stock account value of $11 million. The company is planning a 5 for 1 stock split. What will the par value
per share be after the split ?

a) $0.15 b)$0.20 c)$1.00 d)$2.50 e) $5.00

Par value per share = ($.11m / 110,000 shares) x 1 / 5 = $.20

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