The charter of a corporation provides for the issuance of100,000 shares of commo

Question

The charter of a corporation provides for the issuance of100,000 shares of common stock. Assume that 40,000 shares wereoriginally issued and 5,000 were subsequently reacquired. What isthe number of shares outstanding?
a. 5,000 b. 35,000 c. 45,000 d. 55,000 The charter of a corporation provides for the issuance of100,000 shares of common stock. Assume that 40,000 shares wereoriginally issued and 5,000 were subsequently reacquired. What isthe number of shares outstanding?
a. 5,000 b. 35,000 c. 45,000 d. 55,000

Explanation / Answer

Not to be confused with authorized shares, outstanding sharesrefer to the number of stocks that a company actually has issued.This number represents all the shares that can be bought and soldby the public as well as all the restricted shares that requirespecial permission before being transacted. As we alreadyexplained, shares that can be freely bought and sold by publicinvestors are called the float, and this value changes depending onif the company wishes to repurchase shares from the market or sellout more of its authorized shares within its treasury.
: so authorizes shares are 100000 : but the outstanding shares are 40000-5000=35000. the number of shares available to be bought andsold : answer is b) 35000

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