when a company sells shares in an initial public offering the ipo price is normally well above the par value this difference will be listed as additional paid in capital in addition any secondary offerings or share buybacks will also affect the value of the capital stock 
advantages and disadvantages of capital stockequity stock sales represent one of the most common ways for a company to raise capital however there are some disadvantages unlike taking loans or issuing bonds a company is not required to repay capital investors at a set schedule in addition it is inexpensive for a company to issue new shares which can be sold at a much higher price than the cost of issuing the securities capital stock represents ownership of the company s equity if a company s founders sell the majority of its voting shares to outside investors they risk losing the ability to control the company s future moreover even if it only sells a small number of shares securities laws will require the company to publish details of its financial health 