Questions: Corporate Form of Organization: Stock Issue Considerations - Knowledge Check Identify the term that best describes each of the following. 1. The number of shares of stock first determined at the time of incorporation. 2. The type of stock issue which involves an investment banking firm. 3. The value assigned to shares of stock that determines the legal capital. 4. A value assigned to no-par shares of stock by the board of directors. Direct issue Indirect issue No-par value Offering Par value Stated value

The answer is as follows:

1. The number of shares of stock first determined at the time of incorporation. The answer is: Authorized shares Explanation: Authorized shares refer to the maximum number of shares that a corporation is legally permitted to issue, as specified in its articles of incorporation.

2. The type of stock issue which involves an investment banking firm. The answer is: Indirect issue Explanation: An indirect issue involves an investment banking firm that acts as an intermediary between the issuing company and the investors. The firm typically underwrites the stock, purchasing it from the company and then selling it to the public.

3. The value assigned to shares of stock that determines the legal capital. The answer is: Par value Explanation: Par value is a nominal value assigned to shares of stock in the corporate charter. It represents the minimum price at which shares can be issued and helps determine the legal capital of the company.

4. A value assigned to no-par shares of stock by the board of directors. The answer is: Stated value Explanation: Stated value is an amount assigned to no-par shares by the board of directors. It serves a similar purpose to par value in that it helps establish the legal capital of the company.

To summarize:

1. Authorized shares
2. Indirect issue
3. Par value
4. Stated value