The price at which new shares are sold to investors almost always exceeds par value.The difference is entered into the company's accounts as additional paid-in capital,or capital surplus.

Question

Quizplus · Accepted Answer

This statement is true. When new shares are sold to investors, the price paid by investors is typically higher than the par value of the shares. The additional amount paid by investors is considered to be additional paid-in capital or capital surplus, which is recorded in the company's accounts as equity.

The Price at Which New Shares Are Sold to Investors