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What is additional paid-in capital (APIC)?

Additional paid-in capital is the incremental value that investors are willing to pay for the stock above the par value of shares issued.

For example, a company might have common stock with a par value of $5, but investors are willing to pay $20 for it. That $15 difference represents additional paid-in capital. The company would receive cash at the $20 per share, then common stock would be recorded at the $5 par value, and the remaining amount is plugged to APIC.

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