Paid In Capital

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What is 'Paid In Capital'

Paid in capital is 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".

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. How do companies report the value of their capital stock?

    Find out how companies report the value of their capital stock in their financial statements, including why some companies ... Read Answer >>
  2. Why can additional paid in capital never have a negative balance?

    Find out why the additional paid-in capital entry on a company's balance sheet can never be negative and how paid-in capital ... Read Answer >>
  3. Does the profit or loss of a company affect its paid in capital?

    Find out why the profits or losses of a business have no effect on its total paid-in capital, including how paid-in capital ... Read Answer >>
  4. How does additional paid in capital affect retained earnings?

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

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  6. What is additional paid-in capital and how does it relate to stockholder equity?

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