Capital Stock (Noun)
Meaning 1
The maximum number of shares authorized under the terms of a corporation's articles of incorporation.
Classification
Nouns denoting possession and transfer of possession.
Examples
- The company's articles of incorporation set a par value for the capital stock and determined the total number of shares that could be issued.
- To change the total number of authorized shares of capital stock, the company must file an amendment to its articles of incorporation.
- Investors purchase a portion of the corporation's capital stock in the hopes of earning dividends and profits through resale.
- Before going public, the founders increased the company's authorized capital stock to raise more capital and meet the requirements for a stock exchange listing.
- Purchasers of preferred stock often receive special consideration as a separate class within the overall capital stock, entitling them to different privileges.
Synonyms
Hypernyms
Meaning 2
The book value of the outstanding shares of a corporation.
Classification
Nouns denoting possession and transfer of possession.
Examples
- The book value of the outstanding shares of the corporation was calculated by dividing the total net worth by the number of shares of capital stock.
- To determine the corporation's financial health, the accountant reviewed the capital stock to assess the book value of the outstanding shares.
- The financial statements of the company showed that the capital stock was issued at a price higher than its current book value per share.
- The merger agreement specified that the capital stock of the acquired company would be converted into a set number of shares of the acquiring company's capital stock.
- The corporation's capital stock was comprised of both preferred and common shares, each with its own distinct book value per share.