8. How much will be recorded as a firm\'s additional paid-in capital if the firm

Question

8. How much will be recorded as a firm's additional paid-in capital if the firm issues 1 million shares that have a $5 par value for $15 per sharei? A. $O 8. $5 million C. $10 million D. $15 million 9. What is the book value per share of equity for a firm with $1 million in net common equity $50,000 in authorized share capital, 25,000 shares issued, and 20,000 shares outstanding? A. $38.00 B.$40.00 C $47.50 D. $50.00 10. A warrant has an exercise price of $40, and the current stock price is $38. An investor holding this option will purchase the stock only if the: A dividend yield on the stock exceeds 10%. B. stock price falls below $38. C. stock price rises above $40. D. stock price falls to $20 or below. 11. Crowdfunding is primarily used as a means for a publicly-traded company to raise additional capital. True False

Explanation / Answer

8(c) Number of Shares $       1.00 Million Issue Price $    15.00 Per Share Par Value $       5.00 Per Share Additional Paid in capital=(Issue Price-Par Value)*Number of shares Additional Paid in capital= ($15-$5)*1Million Additional Paid in capital= $    10.00 Million 9(d) Autorized share capital 50000 Issued Share capital 25000 Sares outstanding 20000 Net Common Equity $       1.00 Million Book Value per share=(Net Common Equity/Number of shares outstanding) Book Value per share= 1000000/20000 Book Value per sare= $    50.00 10 (C) Exercise of Warrant $40 Current Stock Price $    38.00 Warrant gives the holder the rigt to purchase company stock,so investor will holding the option to purchase the stock only if stock price rises above $40. 11(True) Crowdfunding is the term used to raise funds from small investments from large number of peoples.So it is the primarily used for public traded company .

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