What does "authorized stock" refer to?

Authorized stock refers to the maximum number of shares that a company is legally allowed to issue as specified in its corporate charter. This figure represents the total potential shares available for issuance but does not necessarily reflect how many of those shares are currently sold to investors or are outstanding. It gives the company flexibility to issue more shares in the future if needed, without requiring further approval from shareholders each time new shares are issued.

The other options relate to different concepts in stock management. While outstanding shares represent the shares currently held by shareholders, repurchased shares are those that the company buys back, and the total shares sold to investors would indicate the shares that have been issued and sold but does not account for the limit set by authorized stock. Understanding the definition of authorized stock is essential for evaluating a company's capacity for raising capital and its growth potential.