📚A corporation's charter specifies the number of authorized shares it can issue.
💼Outstanding shares are the total authorized shares that have been issued and are currently held by stockholders.
🗳️Holders of common shares have voting rights and can participate in important corporate decisions.
💰Common shareholders have the right to share in the distribution of earnings.
🔒Preferred shareholders have preferential rights, such as priority in receiving dividends.
What are authorized shares?
—Authorized shares are the maximum number of shares that a corporation can legally issue, as specified in its charter.
What are outstanding shares?
—Outstanding shares are the total authorized shares that have been issued and are currently held by stockholders.
What rights do common shareholders have?
—Common shareholders have voting rights, the right to share in the distribution of earnings, and the right to the assets of the corporation in the event of liquidation.
What are the benefits of preferred shares?
—Preferred shareholders have preferential rights, such as priority in receiving dividends, and may have additional benefits depending on the class of preferred stock.
What is treasury stock?
—Treasury stock refers to shares of a corporation's stock that have been issued and subsequently reacquired by the corporation.
00:00When a corporation is formed, the number of authorized shares it can issue is stated in its charter.
01:20There are two main classes of stock: common stock and preferred stock.
02:47Preferred shareholders have preferential rights, such as the right to receive dividends before common shareholders.
03:19Dividend rights for preferred stock can be current, cumulative, or participating.
04:38Preferred stock dividend rights may be stated as dollars per share or as a percentage of par.
