Lewelling Company issued 115,000 shares of its $1 par common stock to the Michael Morgan law firm as compensation for 5,500 hours of legal services performed. Morgan’s usual rate is $250 per hour. By what amount should Lewelling's paid-in capital—excess of par increase as a result of this transaction?

Which of the following statements is correct? stockholders should generally be happier than bondholders to have managers invest in risky projects with high potential returns as opposed to safe projects with lower expected returns. potential conflicts between stockholders and bondholders are increased if a firm's bonds are convertible into its common stock. takeovers are most likely to be attempted if the target firm’s stock price is above its intrinsic value. one advantage of operating a business as a corporation is that stockholders can deduct their pro rata share of the taxes the firm pays, thereby eliminating the double taxation investors would face in a partnership.