Question

A corporation has issued 50,000,000 shares of common stock at $.50 par. The corporation has 10,000,000 shares of Treasury Stock on its books. The aggregate par value of the outstanding shares is:A. $20,000,000B. $40,000,000C. $80,000,000D. $100,000,000

Answer 1

Answer:

A. $20,000,000

Explanation:

Issued stock is the total number of shares issued by the company.

Treasury stock are those share which is company has bought back from the market.

Outstanding stock are the share which is held by the stockholders of the company. The treasury shares are excluded from it because these share are held by company by itself not by the stockholders.

Issued Share of the corporation = 50,000,000 share

Treasury shares = 10,000,000 shares

Outstanding share = 50,000,000 - 10,000,000 = 40,000,000 shares

Aggregate par value of outstanding shares = 40,000,000 x $0.50

Aggregate par value of outstanding shares = $20,000,000