Explain each of the following terms: authorized capital stock, unissued capital stock, issued capital stock, outstanding capital stock, and treasury stock.

Per the company’s constitution, authorized capital refers to the maximum amount of capitala company can issue to its shareholders.

Unissued shares are shares of companies thatdon’tcirculate or don’t seem to be soldby the corporate on the market.

The issued capital stock issolelythe value of the sharesthat a company offers to investors.

The number of shares issued is generally the amount of subscribed capital, although none of these amounts may exceed the authorized amount.

The term “outstanding share capital” refers to the total shares issued under subscription contractsbinding on the subscriber.

To calculate outstanding capital stock, add both preferred and common shareoutstanding and subtract it with the number of treasury shares.

Treasury shares, also called stock orreacquired shares, talk over with previously outstanding shares which the company repurchases.

A company can benefit from Treasury stock by including it as part of employee stock option plans.