Issuance of Security Packages

LO 15.3 Occasionally, a corporation will combine securities into a package (for example, common stocks, preferred stocks, bonds) and issue these securities as a single unit.

Required:

1. Assuming that two securities (common stock and preferred stock) are issued as a unit, explain the alternative ways of valuing the separate stocks of the unit in an exchange for (1) cash or (2) an asset(s) other than cash.