ABC Company issued 10,000 common stocks with a par value of $5 and a fair value of $25 per share along with 15,000 preferred stocks with a par value of $15 and a fair value of $20 per share. Both shares were issued for a total (lump sum) of $530,000. How much of the $530,000 should be allocated to common stock? a. $250,000

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Stockholder's Equity

The stockholders’ equity (often referred to as the book value of the company) is the number of assets available to the stockholder after its entire liabilities is paid off. The stockholders’ equity is also sometimes referred to as owner's equity. The stockholders’ equity or book value generally includes common stock, treasury stock retained earnings. It is an indicator of a company's financial strength and is an important item on the company's balance sheet.