Question

A firm has 1,500,000 shares authorized, 880,000 issued, and 470,000 outstanding. How many shares are owned by shareholders (both outside shareholders and the firm itself)? Your Answer:

Answer 1

Shareholders' equity includes the amount of money paid for shares of stock above the stated par value, known as additional paid-in capital, which in this case is 880,000.

The number of outstanding shares a company owns is an integral part of shareholders' equity. It is the amount of company stock that has been sold to investors and not repurchased by the company, which in this case is 470000.

Thus, total shares owned by shareholders (Both outside and the firm) is 880000+470000 = 1350,000

1. Treasury stock, also known as treasury shares or reacquired stock refers to previously outstanding stock that is bought back from stockholders by the issuing company. This reduces the total number of outstanding shares on the open market. These shares are issued but no longer outstanding and are not included in the distribution of dividends or the calculation of earnings per share. Treasury stock is a contra equity account recorded in the shareholder's equity section of the balance sheet. When a company initially issues stock, the equity section of the balance sheet is increased through a credit to the common stock and the additional paid-in accounts.Treasury shares reduce total shareholders' equity and are generally labeled as "treasury stock" or "equity reduction".

Here, paid in capital is $5460700 and shareholders equity is $8600450. In absence of any information given on other components of shareholders equity like Retained earnings, it is difficult to determine the treasury stock component.

2. The New York Stock Exchange has two sets of listing standards for international companies: domestic standards and worldwide standards. A separate timely disclosure policy is required eg. Statement of understanding.

If issuing material news between the hours of 7:00 am and 4:00 pm, listed companies are required to call the NYSE's Market Watch & Proxy Compliance team at least ten minutes in advance of issuance and a copy of the press release or other Reg-FD compliant method must be submitted.