Roy Rodgers, the owner of a sole proprietorship, is planning to incorporate his business. His capital account

Question:

Roy Rodgers, the owner of a sole proprietorship, is planning to incorporate his business. His capital account has a balance of $480,000 after revaluation of the assets. His cash account totals $80,000. He will receive 8 percent, $100 par-value preferred stock with a total par value equal to the cash transferred. The balance of his capital is to be exchanged for shares of $50 par-value common stock with a total par value equal to the remaining capital. How many shares of preferred stock should be issued to Rodgers? How many shares of common stock should be issued to Rodgers?

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...