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stocks ch 8 - II Stock A Categories 1 Authorized number of...

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II. Stock A. Categories 1. Authorized: number of shares a corporation is authorized to issue based upon its charter 2. Issued: number of shares a corporation offers to the public for sale 3. Outstanding: issued shares that are currently held by stock holders 4. Treasury shares: issued shares available for sale being held by the corporation a) Treasury shares = issued shares – outstanding shares b) If treasury = 0, authorized = issue = outstanding 5. Authorized > issue > outstanding B. Equity components 1. Paid – in – capital (contributed capital): capital contributed by stock holders 2. Retained earnings: C. Selling 1. Par value: an arbitrary amount assigned to each share of stock when it is authorized that business must retain / unit of stock to protect creditors 2. Market price: the price that each amount of share stock will sell for in the market a) Determined by expectations, confidence, and new products b) Published by NYSE D. Types 1. Common: exists when only one class of stock is outstanding; all stockholders
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