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 bought back,the company cancels 2 million and holds 1 million.The current number of outstanding shares after these transactions have been accounted for is:
A)8 million shares.
B)20 million shares.
C)10 million shares.
D)9 million shares.

Question

Quizplus · Accepted Answer

The company initially sold 12 million shares. After buying back 3 million, the outstanding shares were reduced to 9 million. Cancelling 2 million shares does not affect the outstanding shares, and holding 1 million as treasury stock also does not change the outstanding shares, which remain at 9 million.

A Corporate Charter Specifies That the Company May Sell Up