Potential Application of Capital Increase within German Stock Corporations

Seminar paper from the year 2015 in the subject Business economics - Investment and Finance, University of Applied Sciences Essen, language: English, abstract: The following paper will provide a definition of a Capital Increase and its different applications in Stock Corporations. Afterwards there will be a closer look at the reasons and motives for a Capital Increase and its consequences for the Shareholders plus some insights in Capital Increases of German Stock Corporations like Deutsche Bank. The conclusion will give a summary of the results and a personal view about options of Capital Increase in Stock Corporations. The changing economic conditions, especially as a result of the globalization of the economy, require higher and higher demands at companies to position and maintain on an international and global market environment. This affects not only those companies that open up new markets but also these ones on home markets who are facing new competition by international competitors. One of the keys to the entrepreneurial success is the funding of the company, which guarantees the short-term securing liquidity and also the long-term business development. One of the essential funding opportunities of Stock Corporations is to increase the equity by Capital Increases towards insoles. A Capital Increase is the essential alternative for the financing by way of credit for a corporation. It increases the share capital and gives the company the opportunity to work with new capital. Though for the investors this often means a dilution of their own rights.