Corporations sell shares of stock in their company to raise capital for business operations. Once this sale has taken place, the stock that was sold is referred to as an issued share. If the stock that was sold remains in the hands of outside investors, it is then referred to as an outstanding share. If the stock is later repurchased by the corporation, it is referred to as a treasury share.
- Skill level:
- Moderately Easy
Determine the par value of the stock. The stock's par value is a minimum price below which a share in the company cannot be issued. Par value is a somewhat obsolete measurement of the true value of stock, but corporations still record it because it is required by law.
Determine the balance in the par value account. This is the amount of investment that the corporation would have obtained if all of their issued shares had been traded at par value.
Divide the balance in the par account by the par value of the stock. The result is the number of issued shares. For example, if you had a balance of £65 and a par value of 0, you would divide 100 by 0.01 to get a total of 10,000 issued shares.
Tips and warnings
- The difference between issued shares and outstanding shares is that issued shares include any shares that the corporation repurchased after issuing them to outside investors.
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