Assessable Stock

DEFINITION of 'Assessable Stock'

A class of stock in which the issuing company is allowed to impose levies on stockholders for more funds. In the past, there was no restriction on how much additional money a company could demand or on how often a company could impose a levy on its stocks.

These are the opposite of non-assessable stocks.

BREAKING DOWN 'Assessable Stock'

Before the twentieth century, assessable stocks were the prevalent type of equity that companies would issue. In order to entice investors into buying this potentially expensive stock, issuers would initially sell the stock at a discount.

For example, an assessable stock has an initial capitalization of $20, but the issuer would sell the stock with a 75% discount ($5). Naturally, seeing how the issuer only received a small fraction of the capitalization, companies would almost always come back to investors for more money. In some cases, companies would eventually take more money than the value of the stock.

However, because all stocks issued today are non-assessable stocks, investors should not have to worry about a company making demands for more money.

RELATED TERMS
  1. Non-Assessable Stock

    A class of stock in which the issuing company is not allowed ...
  2. Assessable Security

    A type of stock that companies issued to investors at a discount ...
  3. Non-Assessable Policy

    A type of insurance policy that cannot require the policyholder ...
  4. Levy

    The legal seizure of property to satisfy a debt. In the U.S., ...
  5. Assessable Capital Stock

    The capital stock of any bank or financial institution that could ...
  6. Mill Levy

    The assessed property tax rate used by local governments and ...
Related Articles
  1. Investing Basics

    How The Stock Market Works

    When you buy a stock, you buy a piece of a company.
  2. Investing

    Advising FAs: How To Explaining Stocks to a Client

    Without a doubt, common stocks are one of the greatest tools ever invented for building wealth.
  3. Home & Auto

    How Property Taxes Are Calculated

    Property taxes are calculated through use of the mill levy and the assessed property values.
  4. Investing Basics

    What is the Stock Market?

    A stock market is where shares in corporations are issued and traded. Stock markets are key components of a free market economy.
  5. Investing Basics

    Why Do Companies Care About Their Stock Prices?

    Read on to learn more about the nature of stocks and the true meaning of ownership.
  6. Professionals

    Equity = Stock

    The term equity is synonymous with the term stock. Throughout your preparation for this exam, and on the exam itself, you will find many terms that are used interchangeably. Equity or stock creates ...
  7. Professionals

    The Uniform Securities Act (USA) - Definitions Part 6

    FINRA/NASAA Series 63 - The Uniform Securities Act (USA) - Definitions Part 6. This section defines and explains the term "sale".
  8. Analyzing The Best Retirement Plans And Investment Options: Stocks

    What they are: Securities that represent ownership in the corporation that issued the stock. Stocks are also called equities. Pros: Capital appreciation; often outperform other investments; ...
  9. Options & Futures

    20 Investments: Common Stock

    What Is It? Stock is sometimes referred to as shares, securities or equity. Simply put, common stock is ownership in part of a company. For every stock you own in a company, you own a small piece ...
  10. Investing Basics

    Stocks Basics: What Causes Stock Prices To Change?

    Stock prices change every day as a result of market forces. By this we mean that share prices change because of supply and demand. If more people want to buy a stock (demand) than sell it (supply), ...
RELATED FAQS
  1. What is the difference between the equity market and the stock market?

    Discover the basic information about the equity, or stock, market and the two primary classifications of equities that are ... Read Answer >>
  2. Why is an increase in capital stock on a company's balance sheet a bad sign for stockholders?

    Understand what capital stock represents for a company and understand the significance for investors when a company initiates ... Read Answer >>
  3. What are the types of share capital?

    Understand the characteristics of common stock and preferred stock, the two ways by which companies obtain share capital ... Read Answer >>
  4. How do restricted stocks, treasury stocks and stock appreciation rights benefit employees?

    Restricted stock represents any equity that is conditionally given or sold to an insider as compensation or as part of an ... Read Answer >>
  5. Why do companies issue preferred stock?

    Learn why companies issue preferred stock in addition to the more widely known common stock, and how it may be beneficial ... Read Answer >>
  6. What are some examples of preferred stock, and why do companies issue it?

    Understand the difference between preferred stock and common stock, and learn the primary reasons why companies issue preferred ... Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center