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Sagot :
The funds provided by common stockholders that consist of common stock, paid-in capital, and retained earnings are referred to as the firm's Net Worth.
What is paid in the capital?
Paid-in capital is the amount that businesses get from stockholders in exchange for their shares. A significant component of a company's entire equity is this. Either preferred stock or the common stock may be used as paid-in capital. These monies are only obtained through the issuer's direct sales of shares to investors; they are not derived from any operating activities or from the sale of stock on the secondary market to other investors.
Paid-in capital does not include earnings from continuing business operations; it only includes money earned from the sale of stock.
If a company decides to repurchase shares from its owners, the balance in paid-in capital may be reduced; this can either be done directly in the account or it can be recorded in a contra equity account that is linked with and offsets the paid-in capital account.
Thus, the investor's money is called Net Worth.
For more information on Net Worth, refer to the given link:
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