A corporate charter specifies that the company may sell up to 20 million shares of stock.The company sells 12 million shares to investors and later buys back 3 million shares.Of the 3 million shares bought back,the company cancels 2 million and holds 1 million.The number of issued shares after these transactions are:
A)12 million shares.
B)9 million shares.
C)10 million shares.
D)18 million shares.

Question

Quizplus · Accepted Answer

The company initially sold 12 million shares and later bought back 3 million. This leaves the company with 9 million outstanding shares. Of the 3 million shares bought back, 2 million were canceled and 1 million were held, leaving a total of 10 million issued shares.

A Corporate Charter Specifies That the Company May Sell Up