Equity Securities Overview
INTRODUCTION In this article, I present an overview of the basic characteristics of equity securities. A corporate security, in its basic form, is a financial instrument which represents an ownership or creditor’s claim in a corporation. An equity security represents ownership in a corporation. COMMON STOCK 2.1. Share Count A corporation’s authorized stock represents the maximum number of shares which a company may issue. A company’s authorized number of shares are specified in the company’s articles of incorporation . A company will generally need shareholder approval before increasing the number of authorized shares. A company issues shares when it distributes shares to investors in consideration of cash, services, or property. A company will typically only issue a fraction of its authorized shares, thus allowing the company to issue additional shares as needed. Shares issued to the public will always be counted as issued shares, regardless of their ownersh