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TeachMeFinance.com - explain capital stock capital stock -- the amount of stock a corporation is authorized to sell by the government authority that grants the corporate charter. Capital stock is sold by the corporation to raise funds to be used to expand or stimulate the business activities of the company. Copyright © 2005 by Mark McCracken, All Rights Reserved. TeachMeFinance.com is an informational website, and should not be used as a substitute for professional financial or legal advice. TeachMeFinance.com and its owner recommend consultation with a professional financial advisor prior to any investment or financial decision. Please read our disclaimer.