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LSDefine
Simple English definitions for legal terms
Outstanding stock
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A quick definition of Outstanding stock:
Outstanding stock refers to the shares of a company that have been sold to investors and are currently held by them. These shareholders have the right to receive dividends and vote in company meetings. The company issues stock certificates to these shareholders. The balance sheet of the company shows the total number of outstanding stocks, while the statement of change in equity records any changes in ownership of outstanding stock during a specific period.
A more thorough explanation:
Outstanding stock refers to the shares of a company that have been authorized and sold to shareholders, and are currently held by them. Shareholders who own outstanding stock are entitled to receive dividend payments and have the right to vote in shareholders' meetings. The company issues stock certificates to the owners of outstanding stock.
The balance sheet of a company's financial statements shows the total number of outstanding stocks. The statement of change in equity records any changes in ownership of outstanding stock during a specific accounting period.
For example, if a company has authorized 1,000 shares of stock and has sold 500 of those shares to investors, then the outstanding stock would be 500 shares. The owners of these shares would have the right to vote on company matters and receive dividends.
It is important for investors to keep track of a company's outstanding stock, as it can affect the value of their investment and their voting power in the company.