Calculate Paid-in Capital

Paid-in capital is the startin capital investment contributed to a new corporation by its owners shareholders. Excess capital above the par value of the common stock is considered additional paid-in capital. Paid-in capital and additional paid-in capital can be found on the company’s balance sheet under Shareholders’ Equity. To calculate paid-in capital, a company must determine the par value of common stock, authorized shares and shares issue to the founding shareholders.Divide the initial capital by the amount of shares the owner shareholders currently own which will equal the par value share price. The par value share price represents the lowest price in which the company stock can be sold or liquidated.Determine the amount of shares the company has issued to the public shareholders. This can be located on the balance sheet under Outstanding Shares.Multiply the outstanding shares by the issued share price to the public shareholders. You can find this price in the stock offering documents used to raise capital for the company. This will be called public capital.Add the public capital to the initial capital investment made by the founding shareholders and you would have calculated the paid-in capital. For additional paid-in capital subtract the issue share price from the par value and multiply that with the number of common shares issued.

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