Question

The charter of Vista West Corporation specifies that it is authorized to issue 213,000 shares of common stock. Since the company was incorporated, it has sold a total of 141,000 shares (at $16 per share) to the public. It has bought back a total of 16,000. The par value of the stock is $4. When the stock was bought back from the public, the market price was $2
Required:
1. Determine the authorized shares.
2. Determine the issued shares.
3. Determine the outstanding shares.

Answer 1

Answer:

The authorized shares 213,000

The issued shares 141,000

The outstanding shares 125,000

Explanation:

The authorized shares are the maximum number of shares that can be issued by the company as spelt out in its charter which is 213,000.

The number of shares issued to the public from its inception till date is 141,000 shares, in other words, that is its issued shares.

The outstanding shares is the number of shares currently held by investors in the company's shares, in essence, outstanding shares are the issued shares minus the shares already bought back( repurchased from shareholders)

Outstanding shares=141,000-16,000.

Outstanding shares=125,000