Unissued Stock - Explained
What is Unissued Stock?
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What is Unissued Stock?
An Unissued stock refers to stock owned by a company but have not been issued or offered for sale in the market. Unissued stock is a class of stock that has been authorized for use in the charter of a company but are yet to be issued. Unissued stocks do not accumulate dividends, neither are they useful for casting votes during shareholders election.
How is Unissued Stock Used?
Unissued Stock should not be confused with treasury stock. Treasury stock refers to a class of shares that had been issued by a company but repurchased by the same company. Unissued stocks on the other hand, are stocks that have not been issued or offered for sale. The availability of unissued stock afford a company flexibly if stocks are needed to be sold or issued in the future. Also, for shareholders, despite that unissued stock yield no dividend and cannot be used in casting vote, it offers dilution in the value of shares of a company chooses to issue the stocks in future.
Unissued Stock and Treasury Shares
Unissued shares are different from treasury shares which were shares sold and repurchased by the company. Regardless that treasury shares and unissued shares are not the same, some companies classify repurchased shares as unissued shares. Shares that have been authorized for use in a company's charter but are yet to be issued are unissued shares. In 2014, Family Dollar Stores filed a 10k with SEC where they stated that Shares purchased under the share repurchase authorizations are generally held in treasury or are canceled and returned to the status of authorized but unissued shares. Hence, to calculate the number of unissued stock, the total number of authorized for issuance is deducted from the total amount of shares outstanding, and treasury stock shares.
- Corporate Governance Law (Intro)
- What is Business Governance?
- Berle-Means Thesis
- Corporate Governance Rating Definition
- Who are the members of a corporation?
- Corporate Charter
- Shareholder Register
- Common Stock
- Preferred Stock
- Par Value
- Authorized Shares
- Issued Shares of Stock
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- Outstanding Shares
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- What is a closely-held corporation?
- Close Corporation Plan Definition
- What is a Private Company vs a Public Company?
- What is the role and purpose of the corporation?
- What is the Agency theory of corporate governance?
- Shareholder-Centric Perspective
- Shareholder Value
What is the Stakeholder theory of corporate governance?
What is the role & rights of Shareholders in the corporation?
- Shareholder Democracy Definition
- Quorum Definition
- Information Circular
- Straight and Cumulative Voting
- Cumulative Voting
- Plurality Voting
- Class Voting Shareholders
- Changing the Voting Rules
- Supermajority (Voting)
- Shareholder Sponsored Proposal
- What are the variations on attributes of Ownership structure?
- Stock Split
- What are the fiduciary duties owed by shareholders?
- When is a shareholder personally liable for corporate obligations?
- Appraisal Rights
- Dissenter's Rights
- Say on Pay Rights
- How can shareholder enforce their rights (direct and derivative actions)?
- What is the process for bringing a Derivative action?
- What are corporate vote Proxies?
- Proxy Statement
- Proxy Fight or Contest Definition & Explanation
- What is Shareholder Activism and the significance of Institutional Investors?
- Activist Investor
- Overview of Board of Directors
- Board Decision Making
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- Chairman of the Board
- CEO as Chairman of the Board
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- Independent Outside Director
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- What standards govern the actions of the board of directors?
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- What is D&O insurance?
- Codetermination (Foreign)
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- What standards govern manager actions?
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- Back-end Plan Definition
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- Operating Company Property Company Model
- Scorched Earth Policy Definition
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- Cadbury Rules Definition