Which statement is true about issued vs outstanding shares?

Which statement is true about issued vs outstanding shares?

• A. Issued shares include treasury shares; outstanding shares do not
• B. Outstanding shares include treasury shares; issued shares do not
• C. Both are always equal
• D. Neither can be greater than authorized shares

Answer: (A)

Think about how stock is tracked: issued shares are all shares the company has ever issued, including those it later buys back. Outstanding shares are the portion of issued shares that are actually held by investors and traded in the market. Treasury shares are the shares the company has repurchased and held in its own treasury; they are not considered outstanding. So issued shares include treasury shares, while outstanding shares do not. That makes the statement true: issued shares include treasury shares; outstanding shares do not.

Think about how stock is tracked: issued shares are all shares the company has ever issued, including those it later buys back. Outstanding shares are the portion of issued shares that are actually held by investors and traded in the market. Treasury shares are the shares the company has repurchased and held in its own treasury; they are not considered outstanding.

So issued shares include treasury shares, while outstanding shares do not. That makes the statement true: issued shares include treasury shares; outstanding shares do not.