purchase company stock
Question
Where does a corporation have stocks from?
How come some corporations can pay employees in form of shares or capitalizing by selling stocks? Are those stocks purchased from the stock exchange by the company itself, or where does it have them from? If the company purchased the shares itself from the market, who receives the voting rights for those? Thanks please answer or give a good reference, not spam
2 months ago - 1 answers
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Modern corporations are incorporated with the ability to authorize issuing additional stock at a very low or nonexistent par value, often something like $0.001 per share. For payment of this amount, additional stock can be issued, which is why most modern corporations set their par values very very low. Essentially, these shares are just created and given to the employee or executive. Mathematically, this dilutes the value of all shares. Normally it'd not a big deal. If there are a million shares and a new one is issued with no additional equity, no one notices that they're 1/1,000,000th less valuable. Sometimes, however, executives have received so many new shares that it noticeably dilutes the value of shares held by existing shareholders. This is called stock dilution. Stock options, once they are vested and exercised become normal voting shares.
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by Frank
2 months ago
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