Stock refers to the security which gives the ownership right to its holder and also a claim on the assets and earnings of a company at the time of liquidation. Stocks can be divided into two parts- preferred stocks and common stock.
Subscribed share capital is that part of issued share capital for which a company has positively received subscription from the investors.
In simple words, when a company issues shares to raise fund, it may or may not find the investors for all of its shares. Thus, the part of issued share capital for which company has successfully found the subscribers is known as subscribed share capital.
Let’s assume that ABC ltd. is registered with a total authorized share capital of INR 1,00,00,000 divided into shares of INR 10 each. The management issues 8,00,000 shares to raise a fund of INR 80,00,000. However, the investors subscribe for only 6,00,000 shares. The company calls for INR 4 per share out of INR 10 (nominal value of shares) and it receives the amount for only 5,50,000 shares.
Authorized share capital
Issued share capital (8,00,000 × 10)
Subscribed share capital (6,00,000 × 10)
So, from the figures given above, it is clear that the subscribed capital for ABC Ltd. is INR 60,00,000. It means that out of 8,00,000 shares, investors have subscribed only for 6,00,000 shares.
Treasury bills are one of the short term debt instruments used by companies to raise funds. In India these type of instruments are issued by the Government of India. T- bills are zero coupon securities means no interest is paid on these instruments.
These bills are issued at price lower than the par value and redeemed at par value. Thus the difference between par value and purchase price becomes the yield for investors.
Uncalled share capital is that part of subscribed share capital which has not been called for payment by a company. A company calls for only a part of share’s price at the time of allotment. The remaining part is called up at a later date. This uncalled or remained part is known as uncalled share capital.
Unissued share capital is that part of authorized share capital which has not been issued by a company for subscription. A company keeps a part of authorized share capital unissued so that it can use the same in future to raise funds. The part which has been kept reserved by the company represents unissued share capital.
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