Which category of stock represents shares currently in the hands of the public and not the issuer?

• A. Outstanding Stock
• B. Treasury Stock
• C. Issued Stock
• D. Authorized Stock

Answer: (A)

Shares that are currently held by investors and are available for trading (not owned by the company) are called outstanding stock. This equals the total shares issued minus any shares the company has repurchased and holds as treasury stock. The distinction matters because outstanding shares are the basis for calculating market capitalization, earnings per share, and voting power—the company itself does not benefit from these shares. Treasury stock, by contrast, are shares the company keeps for itself and are not outstanding, so they don’t confer voting rights or dividends. Issued stock includes all shares the company has ever put into existence, which can include both outstanding shares and treasury shares, so it’s a broader category. Authorized stock is simply the maximum number of shares the company is allowed to issue under its charter, not the number currently in circulation.