Question

Company X raises $100,000 by issuing a combination of equity and taking out a bank loan. Equity makes up 65% of the total funds raised and 10,000 shares of common stock were sold. If the total APIC is equal to $45,000, what is the par value of a share of the common stock (in dollars)?

Answer 1

Solution:
	CALCULATION OF PAR VALUE OF COMMON STOCK
	Total Value of Fund raised =	$                   100,000
	Equity Makes up	65%
	Value of fund raised in Equity =	$                      65,000
	Less: Total Addittional Paid in capital	$                      45,000
	Par value of the common stock	$                      20,000
	Divide By	"/" By
	No. of common Stock is issued	10,000
	Equals to Par value of the common Stock	$                                2
Answer = Par value of the stock = $ 2.00 Per Shares