additional paid-in capital

Additional Paid-In Capital

Capital that a company raises in a financing round in excess of the capital's par value. For example, additional paid-in capital may occur when a publicly-traded company makes a new issue of stock with a par value of $5 per share and places it with investors for $8 per share. Companies can only raise additional paid-in capital on the primary market because they do not receive any additional money from trades on the secondary market. It is important to note that it has become rare for stock to have a par value. See also: Paid-in Capital.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

additional paid-in capital

Stockholder contributions that are in excess of a stock's stated or par value. For example, if a firm issues stock with a par value of $1 per share but sells the stock to investors at $10 per share, the firm's financial statements will show $1 in common stock and $9 in additional paid-in capital for each share issued. Also called capital surplus, paid-in surplus.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
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