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Definition

<p style="text-align: justify;">A figure on the <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">balance sheet</span> representing the amount of money raised by the <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">company</span> through the issue of <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">shares</span> to the public. A company is a vehicle specifically designed to raise <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">capital</span> from the public for a particular commercial enterprise. Companies <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">list</span> on the <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">stock exchange</span> because the existence of a strong <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">secondary market</span> makes it much easier for them to raise capital in the <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">primary market</span>. This can be done at listing in an <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">initial public offer</span> (IPO) or later by way of a <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">rights issue</span>. The <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">share capital</span> of a company is the total of all monies raised by way of the <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">issue of shares</span>. You should also be aware that listed companies often issue several different classes of shares which offer different <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">risk</span>s and potential <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">return</span>s - such as ordinary and <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">preference share</span>s.</p>