Paid In Capital

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DEFINITION of 'Paid In Capital'

The amount of capital "paid in" by investors during common or preferred stock issuances, including the par value of the shares themselves. Paid in capital represents the funds raised by the business from equity, and not from ongoing operations.

Paid in capital is a company balance sheet entry listed under stockholder's equity, often shown alongside the balance sheet entry for additional paid-in capital. It may also be referred to as "contributed capital".

 

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BREAKING DOWN 'Paid In Capital'

Paid in capital can be compared to additional paid in capital, and the difference between the two values will equal the premium paid by investors over and above the par value of the shares. Preferred shares will sometimes have par values that are more than marginal, but most common shares today have par values of just a few pennies. Because of this, "additional paid in capital" tends to be representative of the total paid-in capital figure, and is sometimes shown by itself on the balance sheet.

 

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RELATED FAQS
  1. Is a company's paid in capital affected by the trading of its shares in the secondary ...

    The amount of paid-in capital a company has is not affected by the trading of its shares on the secondary market. Paid-in ... Read Full Answer >>
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    The profits or losses of a company do not affect its paid-in capital. Paid-in capital is generated solely by the sale of ... Read Full Answer >>
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    The par value of a stock is the stated value per share as outlined in the issuing company's charter. Also called the face ... Read Full Answer >>
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