How to Increase Capital Stock
Capital Stock is the total amount of money invested in a particular firm or organization by its investors. If one possesses stock of a company, it means that he or she has invested his or her money in the organization and is therefore, declared to own a part of the organization, as he or she has contributed to the cause of the organization. The capital stock of an organization can be increased by attracting more and more people to invest by using different techniques.
Instructions
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1
Release new stocks
In order to bring in more money to the firm in the form of capital, you’ll need to issue new stock. This is necessary as you’ll be providing potential investors with the opportunity to invest in your firm. This measure can help you collect more funds for your organization and increase the amount of enlisted capital for your company. Organizations often issue new stocks every now and then to gather more and more capital, as this is the only source of money apart from the profits they’re currently earning via their business. -
2
Issue Preferred Stock
Another way to bring in capital to your firm is preferred stock. Preferred stock is more like a privileged membership in the organization. These people have a special status in the events if the company was to ever face financial trouble. The preferred stockholder, along with bondholders receive their payments before any other stock holder gets their money back if the firm was to be liquidated or filed under bankruptcy. -
3
Sell Your Stock
Selling your shares is another option to raise capital. However, this is a risky option as you decide to part with the share of the firm you own for bringing in money so that the organization may proceed with its plans and strategies. This is a desperate measure undertaken by organizations when they don’t have much choice. -
4
Spread the rumour
This is another way to bring in capital for your firm. Suppose there is this project coming up and everyone wants to invest in that. You can start spreading a rumour by asking someone else to do this for you by associating your firm with that project. People would get instantaneously interested in investing in your firm, as they’ll believe that they would be investing in that project through your firm, which is not really the case. This is often considered as an unethical means of bringing in capital, but again that’s not enlisted as a crime as you didn’t declare nor participated in this activity directly in doing this so.
