APIC (Additional Paid In Capital) is equal to which of the following?

APIC (Additional Paid In Capital) is equal to which of the following?

• A. Par value
• B. Issue price minus par value
• C. Par value plus APIC
• D. Issue price per new share minus par value per new share

Answer: (D)

Additional Paid-In Capital is the amount investors pay in excess of a stock’s par value. On a per-share basis, this premium is calculated as the issue price per share minus the par value per share. The total APIC is that per-share premium times the number of shares issued. Since the option expresses the premium per new share as issue price per new share minus par value per new share, it directly matches this definition. Par value is just the nominal value of the share and is not APIC, which is why the other framing wouldn’t represent APIC itself.

Additional Paid-In Capital is the amount investors pay in excess of a stock’s par value. On a per-share basis, this premium is calculated as the issue price per share minus the par value per share. The total APIC is that per-share premium times the number of shares issued. Since the option expresses the premium per new share as issue price per new share minus par value per new share, it directly matches this definition. Par value is just the nominal value of the share and is not APIC, which is why the other framing wouldn’t represent APIC itself.