- The Words Of The Week
- Authorized Capital Stock Definition
- Meaning Of Capital Stock In English
- British Dictionary Definitions For Capital Stock
- How Does A Share Premium Account Appear On The Balance Sheet?
- Related Definitions
Capital Stockmeans, with respect to any Person, any capital stock , shares, interests, participations or other ownership interests of such Person and any rights , warrants or options to purchase any thereof. Capital Stockmeans, for any entity, any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in stock issued by that entity. Capital Stockof any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in equity of such Person, including any Preferred Stock, but excluding any debt securities convertible into such equity.The Alphabet board authorized the company to repurchase up to an additional $50 billion of its Class C capital stock. The Alphabet board authorized the company to repurchase as much as an additional $50 billion worth of its Class C capital stock. In accounting, this is approximated using the sum of the company’s common stock and preferred stock at the prices at which they were initially sold to the public during an offering. If a company obtains authorization to raise $5 million and its stock has a par value of $1, it may issue and sell up to 5 million shares of stock. The difference between the par value and the sale price of the stock is logged under shareholders’ equity as additional paid-in capital. Capital stock can be issued by a company to raise capital to grow its business.
The Words Of The Week
The common stock balance is calculated as the nominal or par value of the common stock multiplied by the number of common stock shares outstanding. The nominal value of a company’s stock is an arbitrary value assigned for balance sheet purposes when the company is issuing shares—and is generally $1 or less. The total amount of stock authorized for issue by a corporation, including common and preferred stock. The amount that a company receives from issuing capital stock is considered to be capital contributions from investors and is reported as paid-in capital and additional paid-in capital in the stockholder’s equity section of the balance sheet. Capital stock and surplus of a member bank means the paid-in capital stock 4 and paid-in surplus of the bank, less any deficit in the aggregate of its re- tained earnings, gains on avail- able for sale securities, and foreign cur- rency translation accounts, all as shown on the bank’s most recent report of condition. Capital Stockmeans with respect to any Person that is a corporation or company, any and all shares, interests, participations or other equivalents of capital or capital stock of such Person and with respect to any Person that is not a corporation or company, any and all partnership or other equity interests of such Person.
Without them, a much smaller capital stock would be pursuing exponentially less commercial vibrancy. IT systems, vehicles, machinery and other assets sometimes come with hidden costs that exceed their purchase price. Learn Total Cost of Ownership Analysis from the premier on-line TCO article, expose the hidden costs in potential acquisitions, and be confident you are making sound purchase decisions. Free AccessFinancial Metrics ProKnow for certain you are using the right metrics in the right way. Handbook, textbook, and live templates in one Excel-based app.Capital stock and surplus as a percentage of total assets at yearend. Still, this is slightly better than an early version of infrastructure legislation that economists at the University of Pennsylvania calculated would reduce long-term economic growth, wages, and capital stock. Add capital stock to one of your lists below, or create a new one. In developed economies, where the capital stock is already large, technological advances and efficiency gains are key.Issued shares can be bought by investors—who seek price appreciation and dividends—or exchanged for assets, such as equipment needed for operations. Capital Stockmeans any and all shares, interests, participations, rights or other equivalents of corporate stock. The company has a present authorized capitalization of 1,200,000,000 shares of capital stock with a $1.00 par value per share.A business can issue shares over time, so long as the total number of shares does not exceed the authorized amount. Authorizing a number of shares is an exercise that incurs legal cost, and authorizing a large number of shares that can be issued over time is a way to optimize this cost. Capital stock and surplus (§ 223.3)Under section 23A, the quantitative limits on covered transactions are based on the “capital stock and surplus” of the member bank.49 The proposed regulation included a definition of capital stock and surplus that the Board previously adopted as an interpretation of section 23A.
Authorized Capital Stock Definition
Authorized capital stock is the maximum number of shares that a corporation is legally allowed to issue. This restriction applies to both common stock and preferred stock. The number of authorized shares is initially set in a company’s articles of incorporation, and can be increased thereafter if a majority of the shareholders approve of the change. The number of authorized shares is usually kept relatively high, so that management has the option to sell additional shares to investors on short notice. Capital stock is the amount of common and preferred shares that a company is authorized to issue, according to its corporate charter. Capital stock can only be issued by the company and is the maximum number of shares that can ever be outstanding.
- If the stock sells for $10, $5 million will be recorded as paid-in capital, while $45 million will be treated as additional paid-in capital.
- Capital stock can only be issued by the company and is the maximum number of shares that can ever be outstanding.
- Learn Total Cost of Ownership Analysis from the premier on-line TCO article, expose the hidden costs in potential acquisitions, and be confident you are making sound purchase decisions.
- In economics, the term capital stock is approximately interchangeable with the terms capital goods, real capital, or capital assets.
The amount is listed on the balance sheet in the company’s shareholders’ equity section. Authorized stock refers to the maximum number of shares a firm is allowed to issue based on the board of directors’ approval. Those shares can be either common or preferred stock shares.
Meaning Of Capital Stock In English
The Balance Sheet summarizes the value of the firm’s Assets, Liabilities, and Equities at one point in time. Companies normally publish the Balance Sheet and other financial statements just after the close of a financial quarter or year. Economists, for instance, often use the term Capital Stock, as do Accountants. In both cases, Capital Stock refers to costly resources that earn income. Economists, however, use the term to explain the source of economic output for nations. Accountants use the term Capital Stock to explain how companies in private industry generate earnings.Capital stock refers to the shares of ownership that have been issued by a corporation. The amount received by the corporation when its shares of capital stock were issued is reported as paid-in capital within the stockholders’ equity section of the balance sheet.Its par value is different from the common stock, and sometimes represents the initial selling price per share, which is used to calculate its dividend payments. The book value of the outstanding shares of a corporation, including retained earnings and amounts paid in by stockholders. In economics, the term capital stock is approximately interchangeable with the terms capital goods, real capital, or capital assets. By any of these names, capital stock items are already-produced, durable goods or any nonfinancial asset that works for the production of goods or services. Paid-in capital is the capital paid in by investors during common or preferred stock issuances. Learn how paid-in capital impacts a company’s balance sheet.Capital stock is the combination of a corporation’s common stock and preferred stock. The amount of capital stock is the maximum amount of shares that a company can ever have outstanding.The number of authorized shares is disclosed in a company’s financial statements. These example sentences are selected automatically from various online news sources to reflect current usage of the word ‘capital stock.’ Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors.
British Dictionary Definitions For Capital Stock
Shares are a unit of ownership of a company that may be purchased by an investor. If the stock sells for $10, $5 million will be recorded as paid-in capital, while $45 million will be treated as additional paid-in capital.
Why capital account is a stock concept?
Capital account is a stock concept as it is measured at a particular point of time. In other words, it is measured only at a single point of time.They would therefore cancel any plans to add to their already excessively large capital stock. For nonfinancial companies, the capital stock grew by 2.4 per cent on average between 1998 and 2007. Treasury stock is previously outstanding stock bought back from stockholders by the issuing company. Issuing capital stock allows a company to raise money without incurring debt. Capital Stock to be IncreasedHalf of the amount of the maximum limit on an increase of capital stock, etc.Learn the best ways to calculate, report, and explain NPV, ROI, IRR, Working Capital, Gross Margin, EPS, and 150+ more cash flow metrics and business ratios. The term Capital appears in quite a few different terms, with different meanings in business finance, investing, budgeting—and the field of Economics. However, all of these meanings have in common a reference to substantial resources for producing goods and services. DisclaimerAll content on this website, including dictionary, thesaurus, literature, geography, and other reference data is for informational purposes only. This information should not be considered complete, up to date, and is not intended to be used in place of a visit, consultation, or advice of a legal, medical, or any other professional. The total stated or par value of the permanently invested capital of a corporation. Is the money that stockholders invest in order to start or expand the business.Additional paid-in capital is the excess amount paid by an investor above the par value price of a stock during an initial public offering .Overall, the authors estimate that the Biden agenda, if fully implemented, would reduce full-time equivalent employment per person by about 3%, the capital stock per person by some 15%, and real GDP per capita by more than 8%. Adam Smith’s Wealth of Nations2 receives credit for imparting an economic meaning to “capital.” By Smith’s definition, capital is stock, while profit refers to realizing the revenue from improvements made to that stock. Smith also viewed capital improvement the preferred objective for the economic and system. Note, however, that Smith called his ideal economic system “natural liberty,” although others later named it “Capitalism.” Sections below further explain the capital stock concept, in context with similar terms from the fields of economics, accounting, and finance. Cumulative preferred stock refers to shares that have a provision stating that, if any dividends have been missed in the past, they must be paid out to preferred shareholders first. In economics, capital stock is the plant, equipment, and other assets that help with production.In our headlong quest for a legally perfect society, we don’t take the time to take stock of what‘s been created so far. Gunshots rang out in Paris this morning on a second day of deadly violence that has stunned the French capital. The word in the example sentence does not match the entry word. The financial hurdle rate event is familiar to nearly everyone in business seeking funding for projects, acquisitions, or investments. When the competition gets serious, the edge goes to those who know how and why real business strategy works. Financial Metrics are center-stage in every business, every day. Metrics are crucial for business planning, making informed decisions, defining strategic targets, and measuring performance.Capital Stockany and all shares, interests, participations or other equivalents of capital stock of a corporation, any and all equivalent ownership interests in a Person and any and all warrants, rights or options to purchase any of the foregoing. Accountants total the firm’s company’s capital stock as the sum of the firm’s common and preferred shares, values equaling their selling prices at their initial public offering. Total par value equals the number of preferred stock shares outstanding times the par value per share. For example, if a company has 1 million shares of preferred stock at $25 par value per share, it reports a par value of $25 million. Preferred stock is listed first in the shareholders’ equity section of the balance sheet, because its owners receive dividends before the owners of common stock, and have preference during liquidation.
Explaining Capital Stock In Context
Random House Kernerman Webster’s College Dictionary, © 2010 K Dictionaries Ltd. American Heritage® Dictionary of the English Language, Fifth Edition. Copyright © 2016 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company.