Capital Stock

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Capital Stock

All shares constituting ownership of a business, including common stock and preferred stock. The amount of shares that a corporate charter requires to be subscribed and paid, or secured to be paid, by shareholders. The amount of stock that a corporation may issue; the amount actually contributed, subscribed, or secured to be paid on. The liability of the corporation to its shareholders after creditors' claims have been settled. The valuation of the corporation as a business enterprise.

Capital stock is distinguishable from the property and assets of the corporation. The property of a corporation fluctuates and may be greater or less than the original capital invested, but the capital stock remains intact and unaffected by the vicissitudes of business.

Undivided profits, or surplus, are not part of the capital stock, although they are included in the general capital or assets of the corporation.

The capital stock of a corporation serves only corporate purposes. It functions as security for the creditors of the corporation who have relied on its existence, since it cannot be diverted or withdrawn to the detriment of corporate creditors. Capital stock is sometimes regarded as a trust fund.

West's Encyclopedia of American Law, edition 2. Copyright 2008 The Gale Group, Inc. All rights reserved.

capital stock

n. the original amount paid by investors into a corporation for its issued stock. Capital stock bears no direct relationship to the present value of stock, which can fluctuate after the initial issue or first stock offering. Capital stock also does not reflect the value of corporate assets, which can go up or down based on profits, losses, or purchases of equipment. Capital stock remains as a ledger entry at the original price.

Copyright © 1981-2005 by Gerald N. Hill and Kathleen T. Hill. All Right reserved.
References in periodicals archive ?
In addition, unlike data for the labour force, capital stock information for different transition economies is not readily available in a format that allows cross-country comparisons.
Each individual is endowed with a production function, A * [f.sup.i](k.sup.i.sub.t]), which maps his individual capital stock into output, and he faces the resource constraint
As a result, many ecological economists are skeptical of monetizing non-monetary capital stocks and thus of the applicability of economics in this regard.
If we were to assume that the Government would adjust its capital stock in the same way as the private sector, and that housing stocks would rise only with incomes and not also with populations, then output would rise exactly in line with employment in the longer run.
Analogously, let [[phi].sub.i] [greater than or equal to] 0 and [[mu].sub.i] [greater than or equal to] 0 denote the fraction of the equipment capital stock and the structures stock allocated toward the production of type i goods.
The CFA Exemption from the FIE Rules is only available to the foreign affiliate in respect of shares of the capital stock of a CFA of the Canadian taxpayer (rather than a CFA of the foreign affiliate itself).
For the years at issue, the Wisconsin statute disallowed a deduction for state taxes on (or measured by) "all or a portion" of net income, gross income, gross receipts or capital stock. The TAC concluded that the MSBT was "measured by net income" within the unambiguous meaning of the Wisconsin statute, because net income was a clearly defined, distinct and essential component of the MSBT total tax base.
Capital productivity is given by the ratio between output and the capital stock. The broadest measure of the latter is the gross capital stock, which is the value of capital assets at their "as new" prices in the current year (gross capital stock at current replacement cost) or in some base year (constant replacement cost.) Several important assumptions are made when calculating the gross stock, including not only how its value should be measured, but also how long an individual asset is expected to remain in the capital stock (its service life) and, once its estimated service life is over, how the asset will be removed (or retired) from the stock (sometimes referred to as the scrapping rate).
From the government's perspective, using those surpluses to pay down the federal debt will reduce future interest payments and free up future tax revenue; from the macroeconomic perspective, the increase in national saving represented by the increase in government saving will lead to a larger capital stock, higher productivity, and an improved standard of living.
Malinvaud and other economists have criticized this approach and stressed the importance of capital stock for employment.(3) But they are in a minority, and the dominant view seems to be that persistent unemployment is mainly due to labour market rigidities which, together with poor education and motivation, are preventing the unemployed from getting work on existing capital stock.
We can discover the sources of this optimism by examining variations in the capital stock in relation to the number of employees hired to work on it.
Maximum amount: up to US$50 million or the lower amount that reaches the repurchase of 10% of Pampa's capital stock, and shall never surpass the limit referred to in item 5;