ISSUANCE OF STOCK

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authorized shares

The maximum number of shares a corporation may issue as indicated in the corporate charter.

Issuance of Stock

The sale of stock from the corporation to the investing public

The adequacy of the consideration received for stock issued by a corporation is determined by which of the following? A The corporation's board of directors B The corporation's shareholders C The corporation's creditors D The Secretary of State

The corporation's board of directors

Prior to incorporation: Subscription agreements are irrevocable for ______________________________.

6 months

Which of the following statements regarding par value stock is FALSE? A Par value can be a nominal amount. B A corporation may, but is not required to, issue par value stock. C A corporation must sell the par value shares for less than the maximum par value amount. D A corporation must sell the par value shares for at least the par value amount.

A corporation must sell the par value shares for less than the maximum par value amount.

Stock Subscriptions

Ask people to agree in advance to buy stock before the corporation is formed.

to issue shares

Number of shares from the authorized pool that the directors have actually sold

Water Stock

The corporation sets a par value amount and sells the stock for less than the stated amount

What is the name given to shares of stock issued to shareholders that remains in their possession?

Outstanding shares

Which best describes stock that is eligible to vote on corporate matters? A Authorized stock B Issued stock C Outstanding stock D Treasury stock

Outstanding stock

Preemptive Rights

Right to acquire stock to maintain the percentage of ownership any time new shares are issued

Which of the following statements regarding preemptive rights is TRUE? A Preemptive rights provide existing shareholders the right to buy stock issued by the corporation in the future at a bargain price. B Preemptive rights require existing shareholders to buy additional shares that are issued by a corporation to maintain their proportional ownership in the corporation. C Preemptive rights give preferred shareholders the opportunity to convert their shares into common stock of the corporation. D Shareholders generally do not have preemptive rights, unless the articles of incorporation provide otherwise.

Shareholders generally do not have preemptive rights, unless the articles of incorporation provide otherwise.

outstanding shares

Shares that were once issued to shareholders and still remain in the possession of the shareholders

treasury shares

Stock previously issued to shareholders, but then reacquired by the corporation

Corporation can receive ______ valid consideration that the board of directors deems adequate

any

four concepts

authorized shares issue shares outstanding shares treasury shares

par value stock

capital stock that has been assigned a value per share in the corporate charter

Outstanding shares

issued- bought back shares

Default rule in most jurisdictions: Shareholders ______________________________ preemptive rights unless negotiated or included in the articles.

do not have

Stock that has been issued by a corporation and then reacquired by the corporation is called __________ stock.

treasury

it's only outstanding shares whose ______is important.

vote

usually, only outstanding shares are

voted


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