• Authorized stock
    • When a corporation is formed, it authorizes a fixed number of shares of stock in the company.
    • The stock is assigned a "par" value that is quite low, such as 10 cents or a dollar per share.
    • There is no correlation between the par value of a stock and its market value.

  • Issued stock
    • A corporation typically issues only a fraction of the number of shares that were authorized at the time it was created.
    • This permits the corporation to issue new stock as needed.

  • Outstanding stock
    • The number of shares actually trading in the market
    • Outstanding stock is equal to the amount of issued stock minus any Treasury stock.

  • Treasury stock
    • Any shares of issued stock that the corporation repurchases; a company might "buy back" its own shares for any of these reasons:
      • The market price of the stock is depressed, and the company can repurchase the shares at an effective discount.
      • Repurchasing the shares will increase the earnings per share since there will be fewer outstanding shares.
      • The Treasury shares can be used instead of cash to make required employee stock options or retirement plan contributions.


Look Out!
It\'s important to be able to distinguish between authorized, issued, outstanding and Treasury stock.



Common Stock Benefits

Related Articles
  1. Investing

    What are Issued Shares?

    Issued shares are the amount of authorized stocks a company’s shareholders buy and own. The annual report shows the number of outstanding shares.
  2. Investing

    What is Treasury Stock?

    Treasury stock is a company’s own stock that it holds in its treasury for later use.
  3. Investing

    Getting Acquainted With Treasury Stock

    When publicly traded businesses decided to buy back some of their outstanding shares, it becomes treasury stock. Treasury stock confers no voting rights or dividends, but helps boost shareholder ...
  4. Investing

    The Basics Of Outstanding Shares And The Float

    We go over different types of shares and what investors need to know about them.
  5. Investing

    Types Of Shares: Authorized, Outstanding, Float And Restricted Shares

    A company’s financial statements may refer to multiple types of stock, including authorized, outstanding, float and restricted shares. If a company issues more shares, its outstanding shares ...
  6. Investing

    What's A Company’s Worth, And Who Determines Its Stock Price?

    A company’s worth is the same as its market capitalization. Market capitalization is stock price multiplied by number of outstanding shares.
  7. Investing

    What's Your Stock's Repurchase Premium?

    Take a closer look at your favorite stock's statement of equity; you never know what you're going to find
  8. Investing

    What Are Corporate Actions?

    Be a savvy investor - learn how corporate actions affect you as a shareholder.
  9. Investing

    Impact of Share Repurchases

    Share repurchases can have a significant positive impact on an investor’s portfolio and are a great way to build investor wealth over time.
Frequently Asked Questions
  1. What are the different types of costs in cost accounting?

    Cost accounting aids in decision-making processes by allowing a company to evaluate its costs. Some types of costs in cost ...
  2. What are the maximum Social Security disability benefits?

    The average Social Security disability benefit amount for a recipient of Social Security Disability Insurance (SSDI) in 2 ...
  3. Do long-term bonds have a greater interest rate risk than short-term bonds?

    There is a greater probability that interest rates will rise within a longer time period than within a shorter period. One ...
  4. How does leverage work in the forex market?

    Investors use leverage to significantly increase the returns that can be provided on an investment. They lever their investments ...
Trading Center