What is Subscribed Capital? Definition of Subscribed Capital, Subscribed Capital Meaning and Concept

What is Subscribed Capital? Definition of Subscribed Capital, Subscribed Capital Meaning and Concept - Definition of subscribed capital is the total value of those shares of a certain company that have been acquired by its shareholders or the general public. The subscribed capital is the total value o…

Definition of subscribed capital is the total value of those shares of a certain company that have been acquired by its shareholders or the general public.


The subscribed capital is the total value of the set of shares that have been acquired by the shareholders of a company, as well as the public. In other words, this refers to the total value of the set of shares that, in other words, have been bought by shareholders. In this way, it is the total capital that investors have contributed to the company as a share purchase.


On the other hand, unlike the paid-in capital, this refers to the shares already agreed. This means that it does not matter if the capital has already been paid up by the shareholder or not.


Difference between issued capital and subscribed capital


Although they are concepts that tend to generate confusion, these are two completely different concepts.


When we speak of subscribed capital, we refer to the capital that represents the set of shares that have been acquired by buyers or investors. In this way, the subscribed capital may be less than the issued capital. Depending on expectations, as well as other factors, the subscribed capital may vary, much or little, from the issued capital.


The issued capital, however, is the total value of the set of shares that a company launches on the market. That is, when a company launches shares of its capital stock, the issued capital refers to the total value of the shares that the company puts up for sale in the markets, available to investors.


Although the two concepts are closely related, they are two completely different concepts.


Example of subscribed capital


Suppose a company wants to create a new production facility, so it wants to make an investment of $ 500,000. To do this, the company wants to make a capital increase worth those 500,000 dollars.


The company's stock trades on the S&P 500 at a nominal value per share of $ 100. 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 $ 500,000, the company launches 5,000 shares worth $ 100 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 $ 500,000, 3,000 titles have been subscribed. These securities, at $ 100 a share, represent $ 300,000. In other words, the subscribed capital has been $ 300,000, while the issued capital has been $ 500,000.


Also read:

Newer Post Older Post Home Jasa Content Placement