Multiple Choice
Which type of corporation is subject to a double layer of taxation, meaning both the corporation and its shareholders are taxed on earnings?
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12. Stockholders' Equity
Characteristics of a Corporation
Multiple Choice
Which of the following classifications represents the greatest number of shares of common stock for a corporation?
A
Issued shares
B
Authorized shares
C
Outstanding shares
D
Treasury shares
Verified step by step guidance1
Understand the classifications of common stock: Authorized shares, Issued shares, Outstanding shares, and Treasury shares.
Authorized shares represent the maximum number of shares a corporation is legally allowed to issue, as specified in its corporate charter.
Issued shares are the portion of authorized shares that have been distributed to shareholders, including both outstanding shares and treasury shares.
Outstanding shares are the issued shares currently held by shareholders, excluding treasury shares (shares repurchased by the corporation).
Treasury shares are issued shares that the corporation has repurchased and holds in its treasury, reducing the number of outstanding shares. Since authorized shares represent the maximum allowable shares, they are the greatest classification.
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