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26 August, 11:10

A corporate charter specifies that the company may sell up to 35 million shares of stock. the company sells 27 million shares to investors and later buys back 10.5 million shares. the number of authorized shares after these transactions are accounted for is:

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  1. 26 August, 12:06
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    The number of authorized shares is 35 million shares

    Explanation:

    Authorized shares is the maximum number of shares a company may issue to investors. In order words, the company is allowed to issue more than its authorized except the company's shareholders amend its corporate charter.

    However, the issued share capital is the number of shares the company has in issue currently, the issued capital here is 16.5 million shares (27 million shares less 10.5 million shares).

    Finally, the company can still issue 18.5 million shares more (35 million minus 16.5 million)
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