An example of the growth factor in common stock is: retaining profits in order to reinvest into the firm two strong companies merging together to increase their economies of scale acquiring a loan to fund an investment in Asia issuing new stock to provide capital for future growth Solution An example of the growth factor in common stock is: 1.retaining profits in order to reinvest into the firm A certain portion of the profits left after meeting all obligations on preferred and debt capital is distributed by way of dividend to shareholders. Another portion is reinvested internally in business ventures so as to increase the rate of return. Reinvestment of funds internally is called ploughing back of funds and funds invested internally are knows as retained earnings..