How is the amount of shares a company can sell determined?
Is it based upon earnings? I know companies usually have hundreds of millions of shares... but how do they come up with that number? Is it the underwriters job to figure that out?
Asked By: Rainingcali - 3/18/2008
Best Answer - Chosen by Asker
The underwriter determines how many shares the company has based on how much capital a company wants to raise.
Answered By: West - 3/19/2008
Additional Answers (4)
It depends on how many the company was authorized to issue by the jurisdiction of its organization
Answered By: botygy - 3/18/2008
When companies are set up they state the number of shares that will be in the company...nowadays they usually sign up for unlimited amount of shares, this sounds bad but isn't, the amount of issued shares or shares outstanding on a diluted basis( accounts for stock options and warrants) is what is important, this can... More
Answered By: bob shark - 3/18/2008
Publicly traded corporations set the number of shares they have in their charter or bylaws. Periodically companies propose charter/bylaw changes to increase their authorized number of shares; this is subject to stockholder approval... More
Answered By: Ben - 3/18/2008
They can sell as many as they want to raise capital. Yes, there is a limit in the company by-laws, but the company sets this limit itself. The public maximum capitalization number is left over from the days when some corporate managers would give stock to themselves and their friends without the existing shareholders... More
Answered By: Bob - 3/18/2008
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