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What does stockholders’ equity represent? What does a share of stock represent? Why do corporations issue...

What does stockholders’ equity represent? What does a share of stock represent? Why do corporations issue stock? What are authorized shares?

Why would the number of shares issued be different from the number of shares outstanding?

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Ans: Stockhollder equity represent the amount of assets left with the company after paying of all its liability if the company immediately went out of the business.

Share of a stock represent claim of the shareholders on company's earnings and its asset

Corporation issue stock generally to raise the funds for expansion of business or pay off its existing liability.

Authorized share capital represent maximum amount of shares that a company can issue for subscription. It is mentioned in the company's articles and company can't issue more than this limit without modifying its articles.

No of Shares issued would be different from the number of shares outstanding if all the shares issued by the company aren't being subscribed( i.e. the case of undersubscription) in such case Shares issued would be different from the number of shares outstanding

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