What is additional paid in capital used for, and why is the par value of a stock so low?

Answer 1

Additional Paid In Capital represents investments that the stockholders or owners have made to the corporation that does not need to be repaid, and no stock was issued for.

Par value is low because it is allowed to be. Par value represents the amount the corporation must return to the shareholder if the corporation liquidates. it is a minimum legal value.

Answer 2

Paid In Capital Represents

Answer 3

Par value is what a company asks for each share of stock when they first create it. once the stock goes public the price will likely increase in price above Par Value, the difference in price between the market value and par value in Capital paid in excess of par value, this only is accounted when someone buys the stock from the company that issues it, if you buy stock from anyone else it does not receive any accounting.

Answer 4

The additional paid-in capital can be sued for virtually any purpose by the corporation.

Par value is low because the corporation wants its obligation to hold these funds to be for as low an amount as possible.