The authorization of share capital will
A) cause shareholders' equity to increase.
B) cause the number of common shares issued to increase.
C) cause the market price of the shares to fall.
D) have no immediate effect on either assets or shareholders' equity.

Question

Quizplus · Accepted Answer

The authorization of share capital is merely a legal step allowing a corporation to issue a certain number of shares in the future. It does not involve issuing shares, changing asset levels, or directly affecting shareholders' equity until those shares are actually issued.

The Authorization of Share Capital Will