Select the best term for each definition below.



Definitions:

  1. Shares held by investors (shares issued that have not been repurchased by the corporation).
  2. Shares that have been sold to investors.
  3. Shares of a company's own stock that it has purchased.
  4. Shares available to sell, stated in the company's articles of incorporation.
  5. Shares that have preference over common stockholders to receive dividends.

Verified Answer :

Final answer:

This answer defines various types of shares in a corporation, such as outstanding shares, issued shares, treasury shares, authorized shares, and preferred shares. Each term relates to specific ownership and corporate practices. Understanding these concepts is essential for grasping corporate finance.


Explanation:

Definitions of Shares in Corporations

In the context of corporate finance, shares represent ownership in a corporation. Here are terms that correspond to specific definitions related to shares:

  1. Outstanding Shares: Shares held by investors (shares issued that have not been repurchased by the corporation).
  2. Issued Shares: Shares that have been sold to investors.
  3. Treasury Shares: Shares of a company's own stock that it has purchased.
  4. Authorized Shares: Shares available to sell, stated in the company's articles of incorporation.
  5. Preferred Shares: Shares that have preference over common stockholders to receive dividends.

Each of these terms plays a significant role in understanding how corporations operate and how they manage their equity.


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