Shares of stock that are issued in order to raise funds for a company. If a company is facing bankruptcy, holders of capital shares have the lowest priority when assets are being liquidated to repay stakeholders. After capital shares are sold, any appreciation or depreciation in its price does not affect the issuing company unless the company plans on buying back their stock. For example, a company issues 100,000 capital shares of common stock for $10 each and ends up raising $1 million for the issuance of those stocks. Unless the company plans to buy back the shares, any future price increases or decreases do not affect the company.
Related information about capital shares:
- Capital Share Definition | Investopedia
Capital shares typically attract investors that are looking more for capital growth than for income growth as profits are made only if the stocks increase in price.
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One of two types of shares in a dual-purpose investment company, which entitle the holder to the appreciation or depreciation in the value of a portfolio, as well ...
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Definition of capital shares: Shares of stock that are issued in order to raise funds for a company. If a company is facing bankruptcy, holders of capital shares ...
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