Capital stock is the number of common and preferred shares that a company is authorized to issue, and is recorded in shareholders' equity. Capital allocation is the process of choosing the best use of an organization's resources and assets to increase shareholder profits.What is capital stock? Capital stock refers to the total value of all physical assets and equipment that a company uses to produce goods and services. Capital stock in accounting is ownership value received for preferred and common shares of a corporation. In economics, Capital stock is production assets. It is the total amount of physical capital at any particular moment in time. Capital is one of the factors of production. Capital stock are equity holders in the company. The extensive analysis speakes not only to the economic benefits, but also the cultural, environmental, and social benefits of historic.