What refers to the maximum amount of common and preferred shares a company is authorized to issue?

The term that refers to the maximum amount of common and preferred shares a company is authorized to issue is "Capital Stock." This term encompasses both common and preferred stock and represents the total value of shares that the company can distribute to shareholders as outlined in its corporate charter. By specifying a maximum amount, companies can delineate the extent of their equity financing and manage their ownership structure accordingly.

In contrast, capital structure refers to the combination of debt and equity that a company uses to finance its operations and grow its business, but does not directly address the authorization of specific shares. Market capitalization, on the other hand, is the total market value of a company's outstanding shares and reflects the current trading price rather than the authorized amount. Shareholder equity indicates the net value of a firm that belongs to shareholders, which is derived from the subtraction of liabilities from assets, rather than the maximum shares authorized. Thus, "Capital Stock" is the precise term that conveys the authorization aspect of issuing shares.