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Chapter 17: Q.13 (page 426)

What does a share of stock represent?

Short Answer

Expert verified

The equity ownership of a company The total number of shares that a business can issue is represented by this text.

Step by step solution

01

Step 1. Concept of stock

Stock is a collection of shares. two types of shares equity shares preference shares.

02

Step 2. Explanation

The term "share" refers to the division of a company's equity into units. The number of units owned determines the percentage of business. The corporation's charter allows it to raise capital by issuing a specific number of shares. As a result, stock of shares refers to the entire number of shares allowed to raise funds.

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Most popular questions from this chapter

The Darkroom Windowshade Company has 100,000 shares of stock outstanding. The investors in the firm own the following numbers of shares: investor 1 has 20,000 shares; investor 2 has 18,000 shares; investor 3 has 15,000 shares; investor 4 has 10,000 shares; investor 5 has 7,000 shares; and investors 6 through 11 have 5,000 shares each. What is the minimum number of investors it would take to vote to change the company's top management? If investors 1 and 2 agree to vote together, can they be certain of always getting their way in how the company will be run?

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