SIE Exam Question 443: Answer and Explanation

Question: 443

Authorized stock is all of the following, except:

• A. It is arbitrarily determined at the time of incorporation and may not be changed.
• B. It is the maximum number of shares a company may sell.
• C. It may be sold to investors to raise operating capital for the company.
• D. It may be sold in total or in part when the company goes public.

Correct Answer: A

Explanation:

A: Authorized stock is all of the answers listed, except the number of authorized shares may be changed by a vote of the shareholders.