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The number of outstanding or issued shares is always equal to or less than the total number of authorized shares. Companies often intentionally keep these two figures different so the organization has future flexibility to sell more shares in the future should it have financing needs.
A stock dividend is a payment to shareholders that consists of additional shares rather than cash. The distributions are paid in fractions per existing share. For example, if a company issues a stock dividend of 5%, it will pay 0.05 shares for every share owned by a shareholder.
Common stock - also called common shares, capital shares, or capital stock - represents units of ownership in a corporation. Purchasers of common stock are granted specific rights that may include the following: Voting at stockholder meetings. Selling or otherwise disposing of stock.
When all authorized shares have the same rights and characteristics, the stock is called common stock.
Common?stock is called common stock when all classes have same rights and privileges. stock. 5. Par value stock?assigned a value per share by the corporation in its charter.
Common stock or shares of stock can be classified as authorized, issued, or outstanding: Authorized stock is the max amount of shares that a company can issue. Generally, a company will not issue 100% of the authorized stock, so issued stock will be less than the authorized amount.
Corporations record capital stock in the equity section on their balance sheets. The amount of capital stock issuable by a company can be changed, but the process requires amending the corporate charter, usually involving difficult, expensive shareholder voting.