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Yes, if a corporation is authorized to issue 1,000 shares of $5 common stock, it is said to have $5,000 of common stock outstanding.
What is common stock?
Common stock is a type of security that represents ownership in a corporation. It is called "common" because it is the most common type of stock that is issued by corporations. When a corporation issues common stock, it is selling ownership stakes in the company to investors.
The number of shares of common stock that a corporation is authorized to issue is typically set out in its articles of incorporation, which are the documents that establish the corporation as a legal entity. The number of shares that are authorized to be issued is referred to as the "authorized capital."
The value of each share of common stock is typically determined by the corporation's board of directors, and it is expressed in terms of a par value. The par value is the minimum value that is assigned to each share of common stock, and it is usually a relatively small amount, such as $0.01 or $0.10. The par value is not necessarily related to the market value of the stock, which is determined by supply and demand in the market.
When a corporation issues common stock, it is said to have a certain amount of common stock outstanding. This refers to the number of shares of common stock that have been issued and are held by investors.
Hence, if a corporation is authorized to issue 1,000 shares of $5 common stock, it is said to have $5,000 of common stock outstanding (1,000 shares x $5 per share = $5,000).
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