Capital Stock

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Related to Capital Stock: issued capital stock

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as security for the creditors of the corporation who have relied on its existence, since it cannot be diverted or withdrawn to the detriment of corporate creditors.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.

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.

References in periodicals archive ?
The issuance of Class C capital stock is an extension of Zillow Group's dual-class structure, whereby Zillow Group's co-founders Rich Barton and Lloyd Frink hold Class B shares.
Since increasing the capital stock also raises the marginal product (or productivity) of labor, the return on labor--wages--should also go up.
For productivity and standards of living to grow, not only must capital raised in markets be allocated efficiently, but internal cash flow, including the depreciation charges from the existing capital stock, must be continuously directed to their most profitable uses.
In Pennsylvania, the issue has arisen whether the corporation's share of the excess of the amount that was incurred to purchase the taxpayer's parent corporation over the historic cost of the parent corporation's assets should be included in computing the taxpayer's capital stock tax liability.
Next, the gross book value capital stock series, which reflect increases and decreases in discards over the business cycle, are used to construct multifactor productivity measures for each industry for 1962-81.
Shareholders also approved an increase in the authorized number of shares of capital stock to 50 million from 20 million, consisting of 15 million shares of Class A capital stock and 35 million shares of Class B capital stock.
For manufacturing, capital stock grew more rapidly than capacity from 1967 to 1980 and more slowly after 1982.
3 million shares of its capital stock in negotiated transactions with institutional investors amounting to approximately $86 million.
Most easily measured economic gains come from increasing the capital stock and improving the efficiency with which the capital stock is used.
The merger agreement is subject to Broadband, on or before February 15, 2007, having sold, or entered into binding subscriptions for the private placement by it, contemporaneously with the closing of the merger, shares of its capital stock in an amount that will result in gross proceeds to the Company of at least four million five hundred thousand dollars ($4,500,000) in a private offering of its securities without registration.
Frederick's will then distribute to holders of class A capital stock two shares of non-voting class B capital stock for each share of class A capital stock.