Answer the following questions.

1. What effect does the issuance of stock at a price above par value have on the issuers net income? Explain.

2. Why is common stock usually not issued at a price that is less than par value?

3. For what reasons might a company like IBM repurchase some of its stock (treasury stock)?

4. Diaz Inc.s common stock has a par value of $1 and a current market price of $15. Explain why these amounts are different.

5. How does the balance sheet for a corporation differ from the balance sheet for a proprietorship?