Paid-In Capital Examples Calculation and Excess of Par Value

Paid-In Capital Examples Calculation and Excess of Par Value

When a company issues shares of stock, it assigns a par value to each share. Par value is the nominal value of a share of stock, which is typically set at a low value, such as $0.01 or $0.10 per share. The par value is used to determine the legal capital of the company.

Paid-in capital is an important metric for investors and analysts as it reflects the amount of money that shareholders have contributed to the company. It is typically reported on the balance sheet under the shareholders’ equity section.

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