Question

Initial sale price of common stock Hudson-Perry Recordings Inc has one issue of preferred stock and one issue of common stock outstanding. Given their stockholders equity account that follows, determine the original price per share at which the firm sold its single issue of common stock. Stockholders Equity ($000) Preferred stock Common stock ($0.22 par, 1,410,000 shares outstanding) Paid-in capital in excess of par on common stock Retained earnings Total stockholders equity $225 310 19,454 1,791 The original price per share is $(Round to the nearest cent.)

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Answer #1

The original price per share of common stock = (Par value of common stock + Additional paid in capital of common stock)/Number of shares

= (310,200+19,454,000)/1,410,000

= $14.02 per share

The given value are in ‘000.

Par value can be calculated by multiplying par value per share with the number of shares

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