A corporate charter specifies that the company may sell up to 20 million shares of stock. The company issues 12 million shares to investors and later repurchases 3 million shares. The number of issued shares after these transactions have been accounted for is:A. 8 million shares. B. 20 million shares. C. 10 million shares. D. 9 million shares.

Question

Business

Cullen Larson

31 March, 07:00

A corporate charter specifies that the company may sell up to 20 million shares of stock. The company issues 12 million shares to investors and later repurchases 3 million shares. The number of issued shares after these transactions have been accounted for is:A. 8 million shares. B. 20 million shares. C. 10 million shares. D. 9 million shares.

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Answers (1)

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Heather Dawson · Answer 1

The correct aswer is B) 20 million shares.

Explanation:

The issuance of shares is widely used by companies when it comes to seeking capital, that is, to capitalize. The initial issuance of shares is known as "primary placement." Once the first issue is finished, the company may continue to issue shares as a way to increase its capital.

In the case described, regardless of the shares that are put up for sale, the minutes clearly state that the maximum number that can be sold is 20 million. When the information is updated in the future, this value will change.