Question

Select the following definitions (or partial definitions) to the appropriate term. Each term may be used once or not at all.

Option 1: An institution charged with responsibility for avoiding overissuance of a corporation's stock
Option 2: An institution responsible for maintaining detailed records of shareholders and handling changes of ownership of stock ownership
Option 3: Shares of its own stock acquired by a corporation for the purpose of being reissued at a later date
Option 4: The formal agreement between bondholders and the issuer as to the terms of the debt

Answer 1

The terms described are likely referring to regulatory practices regarding stock issuance, a transfer agent for stock record-keeping, treasury stock for corporation-owned shares, and the indenture of a bond agreement.

Step-by-step explanation:

When relating to a corporation and its dealings with stocks and bonds, several terms are used to describe different aspects and entities involved in the process. Here are the terms matched with their appropriate definitions:

• Option 1: This is likely referring to a regulatory authority or a department within the corporation that ensures the company does not issue more stock than authorized. However, a specific term for such an institution isn't provided in the given information.
• Option 2: This describes a transfer agent, which is a financial institution appointed by a corporation to keep records of every shareholder and manage any changes in stock ownership.
• Option 3: This refers to treasury stock or reacquired stock, which is stock that a corporation has issued and later reacquired. It may be held by the corporation for various purposes and potentially reissued.
• Option 4: This corresponds to the indenture, which is a legal and binding contract specifying all the important features of a bond, such as the coupon rate and the maturity date.

It's essential to understand these terms when discussing the structure and operations of a corporation, especially in the context of financial management and investor relations.