Sometimes the company issues shares of common stock at a premium to the face value. Though the face value of the common stock is Rs.10, company might issue the stock at a premium of Rs.5. So the buyer will have now have to pay Rs.15 for each share of common stock instead of the earlier Rs.10. Continuing from the earlier example, suppose 10,000 shares have been issued at a price of Rs.15, with the premium being Rs.5. Rs.1,00,000 (10,000 * 10) will be the total common stock and Rs.50,000 (10,000 * 5) will be the additional paid in capital.
Additional Paid-in Capital Print
Modified on: Fri, 30 Oct, 2020 at 1:35 AM
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