Share Capital

Glossary

Banking

Share Capital

A company’s share capital is made up of the capital raised through the issuance of ordinary shares and preference shares (preferred stock). Companies finance their assets through a combination of share capital and liabilities (borrowing). Share capital consists of the par value of the shares multiplied by the number of shares sold plus any share premium raised from selling the shares above their par value, which is listed on balance sheets as additional paid-in capital.

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