Common Stock

Question 1

An equity investor can make money by buying at a low price and selling at a higher price. This is called a _______ because it is a gain in the original capital invested. It is also called appreciation because the stock appreciates (rises) in value

Answer 1

Capital Gain

Question 2

Common stock offers investors a ____ (proportional) share of the corporation’s ownership and profits—more shares equals more ownership.

Answer 2

Pro Rata

Question 3

When a corporation is organized, the ______ must state how many shares of each class of stock are authorized to be issued. T

Answer 3

Corporate Charter

Question 4

The shares a corporation is authorized to issue are called

Answer 4

Authorized Shares

Question 5

The authorized shares that have been sold to shareholders are called

Answer 5

Issued Shares