A stock is a share of a firm that represents ownership. Companies issue stock to raise capital for the business. For shareholders, stocks are a way to invest their money and outdo inflation over time.
Classes of Stock Identified.
The two classes of stock presented in the balance sheet are;
Preferred stock.
Common stock.
Preferred stock owners have a guarantee of a fixed dividend. However, the share ownership has no voting rights. Common stock owners have fluctuating dividends that are never guaranteed. The common stock investors have an entitlement to shareholder voting rights.
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Par Value, Issued Shares, and Authorized Shares.
Par value of a share is the price written on the face of the stock certificate or in the operating documents of a company. Authorized shares refer to the highest number of stock that a firm can sell. Issued shares indicate the actual amount of stock that a corporation has sold. The par value, issued and authorized stock presented in the balance sheet are as follows;
Preferred stock
Par value is $0.
The number of authorized shares is 165,000,000 .
Issued shares are 0.
Common stock
Par value is $ 0.01.
The number of authorized shares is 3,500,000,000.
Issued shares are 1,660,600,000.
