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Accounting for Share Transactions The Mayfair Corporation went public on January 1, 2015, with an initial...

Accounting for Share Transactions
The Mayfair Corporation went public on January 1, 2015, with an initial public offering of 10,000,000 common shares, $1 par value, at a market price of $3 per share.

Since then, the following equity transactions had occurred:

In 2016, a 10% stock dividend was issued. At the time, the Mayfair common shares were trading at $6 per share.

In 2017, a 3-for-1 forward stock split was executed. At the time, the Mayfair common shares were trading at $12 per share.

In 2018, 500,000 common shares were repurchased on the open market at a price of $15 per share.

On December 31, 2018, the company declared and paid its first cash dividend of $0.1 per share on all outstanding common shares.

1. Calculate the par value per share and the number of shares outstanding for the Mayfair Corporation on December 31, 2018.

Dec 31, 2018 shares outstanding and par value? Rounded to 2 decimal places.

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Answer #1

Ans. Calculation of total no of share outstanding for the mayfair corporation on dec31 2018

Jan 01 2015 Initial Public offer                 :    10000000

Share after stock split 3 for 1 (10000000X3) : 30000000

Less: Repurchase from Open market          : 500000

Oustanding share in Dec 31 2018            : 29500000

Calculation of Par value of share

Initial offer value @1 each share

Par value after stock split is (1/3) = $0.33 per share

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