Stock issue transactions take place at the current market price. Your company pays a 5% brokerage fee for issuing stock. New stock issues are limited to 20% of your company’s outstanding shares in that year.

Stock price is a function of:

• Book Value
• Earnings Per Share (EPS)
• Annual Dividend

Book value is equity divided by shares outstanding. Equity equals the common stock and retained earnings values listed on the balance sheet. Shares outstanding is the number of shares that have been issued. For example, if equity is $50,000,000 and there are 2,000,000 shares outstanding, book value is $25 per share.

EPS is calculated by dividing net profit by shares outstanding.

The dividend is the amount of money paid per share to stockholders each year. Stockholders do not respond to dividends beyond the EPS, they consider them unsustainable. For example, if your EPS is $1.50 per share, and your dividend is $2.00 per share, stockholders would ignore anything above $1.50 per share as a driver of stock price.

As a general rule, stock issues are used to fund long term investments in capacity and automation. 

Emergency loans depress stock prices, even when you are profitable. Stockholders take a dim view of your performance when they witness a liquidity crisis. 

All of these factors are profit dependent. You need to make sufficient profit to increase the book value of your company and pay a dividend. Improving profit also improves EPS.
You can retire stock. The amount cannot exceed the lesser of either:

• 5% of your Market Capitalization, listed on page 2 of last year’s Courier; or
• Your Total Equity listed on Page 3 of last year’s Courier.

You are charged a 1.5% brokerage fee to retire stock.