SISA Ltd is a company with 40 000 authorised Ordinary Share Capital with a par value of R1. The company issued 30 000 shares at R1.30 for each share. What would be the effect of this transaction in SISA’s records? Select one: a. Ordinary share capital will increase by R39 000 and share premium will be unaffected. b. Ordinary share capital will increase by R39 000 and share premium will increase by R9 000. c. Ordinary share capital will increase by R30 000 and share premium will increase by R39 000. d. Ordinary share capital will increase by R30 000 and share premium will increase by R9 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.