The number of shares that a corporation's charter allows it to sell is referred to as:
A)Issued stock.
B)Outstanding stock.
C)Common stock.
D)Preferred stock.
E)Authorized stock.

Question

Quizplus · Accepted Answer

The number of shares that a corporation's charter allows it to sell is referred to as authorized stock. This is the maximum number of shares that a corporation can issue to investors. Issued stock refers to the shares that have been sold by the corporation to investors, outstanding stock refers to the shares that are currently held by investors, common stock is a type of ownership in a corporation that has voting rights and receives dividends, and preferred stock is a type of ownership in a corporation that typically receives a fixed dividend and has priority over common stock in terms of receiving payment if the company goes bankrupt.

The Number of Shares That a Corporation's Charter Allows It