When a company’s stock is listed in the shareholder’s equity section of the balance sheet, how is the stock valued? I know that there may be more than one line item listing the company’s stock value (par value / additional paid in capital / surplus capital), but it seems like mathematically the value couldn’t possibly be recorded as (par value + additional paid in capital) * # of shares outstanding because the result would equal a company’s market capitalization meaning that the value of a company’s shareholder’s equity would be greater than its market cap which is basically never the case. Say a company’s market cap was $100 billion (the price of its stock was $100 and the company has 1 billion shares outstanding), why wouldn’t $100 billion be listed on the par value + APIC portion of the balance sheet. I mean, I understand why it isn’t – I understand why it wouldn’t make sense (see above) but I don’t understand how the stock would actually be recorded. Thanks.
EDIT: According to Apple's balance sheet, Apple has $35.867 billion common stock (and $0 APIC which means that the company just lumps every stock valuation together into one line item?) and $5.252 billion shares outstanding giving each share a value of less that $7 - does anyone know how this number is calculated?
Submitted January 06, 2018 at 09:37AM by traderlmd http://ift.tt/2CMpLjE
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