Capital stock is the amount of common and preferred shares that a company is authorized to issue, according to its corporate charter. The King formula uses a cycle service.If you use a different service level metric, the formula needs to be adjusted. In this video I introduce the Solow growth model and show how to solve for the steady state. Equity is composed of total investment or paid capital (i.e. Figure 1 shows the inventory profile for a single material in a fixedinterval strategy. This last equation determines the development of the capital stock over time. The equation for the change in the capital stock is one of the fundamental ingredients of economic growth. Capital stock is the amount of common and preferred shares that a company is authorized to issue, according to its corporate charter. Review the company's balance sheet in the shareholders' equity section for details.