Issued capital

economic-dictionary

The issued capital is the nominal value of the total set of shares that a company launches, for sale, on the market. This can be signed by the general public, as well as shareholders.

The issued capital is the total value of the set of shares that a company launches on the market. In other words, when a company launches shares of its capital stock, either for the first time or as a capital increase, the issued capital refers to the total value of the shares that the company puts up for sale, available to interested investors. These investors can be current shareholders of the company or new investors.

The issued capital can be issued in shares with an issue premium or discount. That is, when a share is issued with a premium, the investor must pay an amount greater than the par value of the share on the market. Whereas, when the share is issued at a discount, the investor can buy the share at a value lower than the par value at which the share is on the market.

Difference between issued capital and subscribed capital

This concept should not be confused with subscribed capital. That is, the issued capital is the total value of shares that is made available to shareholders or the general public for them to acquire. Meanwhile, the subscribed capital is, finally, the capital that the shareholders or the public have acquired in the market of the company that launched the capital, that is, the value of the number of shares that have been subscribed (bought).

This means that the subscribed capital, at times, does not equal the issued capital. This is because there is no obligation that all the shares placed on the market must be acquired by shareholders.

Example of issued capital

Suppose a company wants to expand in other countries, so it wants to make an investment of $ 100,000. To do this, the company wants to make a capital increase worth those 100,000 dollars.

The company's stock trades on the NASDAQ at a par value per share of $ 20. Therefore, since the company does not wish to issue the new shares at a discount or with an issue premium, it issues them at the same nominal value that they are on the market.

Therefore, since it wants to raise $ 100,000, the company launches 5,000 shares worth $ 20 to the market.

After the shares are launched, investors, not very enthusiastic about the project, want to buy 3,000 shares. That is, of the issued capital, which was $ 100,000, 3,000 titles have been subscribed. These securities, at $ 20 a share, represent $ 60,000. In other words, the subscribed capital has been $ 60,000, while the issued capital has been $ 100,000.

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