Initial sale price of common stock Haymitch Brewing Corporation has one issue of
ID: 2818762 • Letter: I
Question
Initial sale price of common stockHaymitch Brewing Corporation has one issue of preferred stock and one issue of common stock outstanding. Given Haymitch's 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
$228
($ 0.49 par, 394,000 shares outstanding)
193
Paid-in capital in excess of par on common stock
2,608
Retained earnings
792
Total stockholders' equity
$3,821
Stockholders' Equity ($000)
Preferred stock
$228
Common stock($ 0.49 par, 394,000 shares outstanding)
193
Paid-in capital in excess of par on common stock
2,608
Retained earnings
792
Total stockholders' equity
$3,821
Explanation / Answer
original price per share at which the stock was sold = 0.49 + 2608000/394000
original price per share at which the stock was sold = 7.11