Accounting: Tools for Business Decision Making, 5th Edition

Published by Wiley
ISBN 10: 1118128168
ISBN 13: 978-1-11812-816-9

Chapter 11 - Reporting and Analyzing Stockholders' Equity - Questions: 8

Answer

The Investment in lower par value Share is always treated as a best investment, as it is easily marketable. Trading in lower par value shares is easy and one gets the customer easily to purchase, so easy and quick transferability.

Work Step by Step

If one has $200 to invest, he will get 40 shares of 5 dollars each, whereas he will get only 10 shares of 20 dollars each. When he has to resell these shares, it will be easy to get a customer for 5 dollars shares, and the total 40 shares can be sold to different buyers.
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