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Share capital, also called equity financing, is the total amount of money and property a company has received for selling its shares to shareholders. 

Share capital is listed in the company balance sheet in two sections.  The first section is the common or preferred stock section.  This account is equal to the par value of the stock sold to the shareholders.  Since stock par value is usually a nominal amount, stock is rarely sold for par value.  The amount paid in excess of par is an account called Additional Paid In Capital. 

Companies sell their shares at different times, not just when they start.  Share capital, as reflected in the balance sheet, is the total amount of all the company’s share sales up to that point in time.  The amount does not reflect the market value of the shares as they are traded in secondary markets. 

ABC Inc. had an initial public offering 10 years ago and raised $500 million. Those shares have since doubled in price, and ABC Inc.’s market capitalization is now $1 billion.  ABC’s balance sheet will only reflect the $500 million initial amount paid for the shares.  If ABC has another offering for $100 million, then its total share capital will be $600 million. 

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