What is an equity premium? What is Equity Premium

The capital premium refers to the amount of capital invested by investors in the process of raising funds in excess of its registered capital.

The difference is calculated based on the difference between the investor's capital contribution and its share attributable in the new registered capital. At the time of the establishment of the enterprise, the capital contribution subscribed by the investor is fully credited"Paid-up capital"Subjects.

The part of the amount actually received or deposited in the bank where the enterprise has an account exceeds its share in the registered capital of the enterprise shall be included in the capital reserve; In the process of reforming the property rights system of enterprises, when the enterprise is restructured and new investors join in, the same amount of capital contribution will have a different impact on the enterprise due to the different time of capital contribution.

At the time of establishment, not only the investment risk is very large, but also the rate of return on capital is very low, and the new investors not only avoid the risk of trial production of products and open up the market, but also enjoy the profits that have been formed in the process of business operation.

Therefore, in order to protect the rights and interests of the original investors, the new investors must pay more than the original investors' capital contribution in order to obtain the same investment ratio as the original investors. Among them, the part of the capital contribution calculated according to the proportion of investment is recorded"Paid-up capital"Accounts, larger than the part should be credited"Capital reserve"Subjects.

Article 82 of Chapter IV Owners' Equity in the Accounting System for Business Enterprises stipulates that capital reserve includes capital (or share capital) premium, donated assets, appropriation transfer, foreign currency capital conversion difference, etc.

Equity premium refers to the amount of money actually received at the time of the issuance of the premium of the shares in excess of the total par value. The equity premium is a type of capital reserve, and the capital reserve refers to the funds invested by investors or others in the enterprise, the ownership of which belongs to the investor, and the amount invested exceeds the authorized capital.

Capital reserves include: capital (or equity) premiums, provisions for non-cash assets receiving donations, provisions for equity investments, transfer-ins of appropriations, differences in translation of foreign currency capital, differences in related party transactions, and other capital reserves.

The equity premium mainly refers to the balance of the issuance fee for the part of the issuance income that exceeds the par value of the issue of shares. The share **** is to raise capital by issuing **.

According to Article 131 of the Company Law of China, **issuance** can be at par amount, or it can exceed the par amount, but not less than the par amount. That is to say, the issuance can only be issued at parity or premium, and there is no problem of discounted issuance in China, and there will be no discount of share capital.

In addition, the total amount of the share capital of the issuance of ** (refers to the par value of the actual issuance of the shares) should be equal to the registered capital.

The equity premium refers to the amount of money received in practice when the premium is issued at the time of the issuance of the share premium, which exceeds the total face value. So what is an equity premium?

The equity premium is a kind of capital reserve, and the capital reserve refers to the funds invested by the investor or others in the enterprise, the ownership belongs to the investor, and the amount invested exceeds the statutory capital. The capital reserve includes: the premium of the capital (or share capital), the provision for accepting the donation of non-cash property, the provision for equity contribution, the transfer of appropriations, the difference in the translation of foreign currency capital, the relevant bid-ask spread and other capital reserves.

The share capital premium mainly refers to the balance of the issuance fee for the part of the issuance income that exceeds the face value of the issue of shares. The share **** is to raise capital by issuing **. According to Article 131 of the Company Law of the People's Republic of China:

**Issuance** can be at par amount, and can also exceed par amount, but not less than par amount. That is to say, the issuance can only be issued at parity or premium, and there is no problem of discounted issuance in China, and there will be no discount of share capital. In addition, the total amount of the share capital of the issuance of ** (referring to the par value of the actual issuance of the shares) should be the same as the registered capital.

Accounting. According to the relevant rules, the shares shall be used as the share capital according to the par value of the shares issued by the proposer and the subscriber when the subscription money is received in practice; For the premium issuance, the balance of the issuance proceeds in excess of the par value of the issuance after deducting the issuance expenses shall be regarded as the premium of the share capital. Therefore, the income obtained from the issuance of shares at a premium shall be recognized at the time of obtaining income in practice.

The amount calculated according to the product of the face value and the total amount of approved shares shall be credited to the share capital account, and the premium part (that is, the part exceeding the face value) shall be deducted from the handling fee, commission, printing capital, etc. paid by the entrusted business to issue the capital reserve account. The portion that is not at a premium or not sufficient to be paid at a premium is amortized over a long period of time and amortized. For overseas listed enterprises, the amount shall be converted into RMB at the exchange rate on the day of receipt of the share payment.

The amount calculated according to the product of the confirmed RMB** face value and the approved total number of shares shall be credited to the share capital account, and the difference between the two shall be credited to the capital reserve account.

Share premium refers to the amount of money actually received at the time of premium issuance of shares in excess of the total par value. The equity premium is a type of capital reserve. For example, the face value is 1 yuan, but you find that it is very popular, so you will issue it, and then it will be a premium.

The equity premium of the issuance of ** is the income obtained by the enterprise from the issuance of ** in the case of ** with the same face value of the ** shares.

In the world of trading and trading, premium is a very broad concept. Generally speaking, when an asset is traded in the market at a price that exceeds its reasonable valuation or fair value, there is a premium to the underlying asset. Often, the case of asset premiums can occur in a number of areas.

First of all, there is an emotional premium to the strong leading stocks in the market. When a specific plate encounters favorable factors and rises sharply, the largest increase in the plate or the earliest to reach the price limit is the leading stock in the plate. Traders in the market like to use a premium to go to the leading stocks.

When the phased increase of A** reaches 15% and the average increase of the entire sector reaches 8%, the difference of 7% between the two is the premium given by the market to A**. Under normal circumstances, the premium of leading stocks will also be reflected in the stage of the sector ****. When the entire sector falls, some leading stocks may rise instead of falling, and this contrarian performance is also a premium.

Therefore, the speculators in the ** often believe in the principle of "if you want to do it, you will be a premium for leading stocks".

Secondly, there is a staged premium in some **type**. When an ETF is valued intraday and it trades on an exchange, the difference is the premium. In the process of trading, we occasionally find that a certain ** has a premium.

The reasons for the premium are complex, but it comes down to investors in the market who love it. When investors in the market like a certain **, they are willing to offer a higher ** than its real-time valuation, and go to **this one**. The reason why investors do this is likely to be that there is a certain ** with the potential for continuous one-word limit among the constituent stocks of this **.

Thirdly, some derivatives related to ** will also have a premium. In the hot phase of the market, convertible bonds tend to have a large premium. This kind of premium often deviates from the **** corresponding to the conversion of bonds.

In a sense, this type of premium is purely the result of a game of market sentiment.

To sum up, the premium phenomenon in the ** and ** markets often has a complex trading background. When we see the phenomenon of premiums, we need to think more about the reasons behind it.

Premium is a **market term, pinyin is yì jià. Refers to the actual amount paid in excess of the nominal value or face value of ** or **. On the **, it specifically refers to the fact that the buying and selling price of the closed-end ** market is higher than the value of the net assets of the ** unit.

We usually say that there is a premium for a **, which means that there is money after deducting various fees such as fees. When we say how much premium space there is, we mean the price difference between the target and the coupon of the company. The premium refers to the fact that the transaction exceeds the face value, and as long as it is exceeded, it is called a premium.

The premium space refers to the amount of the transaction that exceeds the face value. Premium refers to the premium, and in the money market, the premium refers to the number of points added to the spot in order to determine the forward or the premium. Symmetrical with agios.

That is, when the "interest rate of the currency is less than the interest rate of the currency". In this case, the swappoint is positive, in this case, the exchange rate points are arranged in the way of left small and right large.

Contango means that the forward rate is higher than the spot rate. Under the outright pricing method, the premium represents the depreciation of the local currency. Conversely, under the indirect pricing method, the premium indicates the appreciation of the local currency.

For example, if the spot exchange rate of RMB against the US dollar is 100 US dollars = yuan, if the premium of the future exchange rate is 10 points, the exchange rate of the future exchange rate is 100 US dollars = yuan, which means that the RMB depreciates by 10 points. Vice versa.

The difference between the amount of the local currency liability at the forward exchange rate and the amount of the foreign currency asset at the spot exchange rate in the forward contract. It is a price that companies pay to hedge against the risk of foreign exchange rate fluctuations. In order to avoid the risk of operating foreign exchange, foreign exchange brokerage banks generally set forward exchange rates that are different from the spot exchange rate.

The portion of the forward contract of the enterprise is translated at the periodic exchange rate in foreign currency, while the portion expressed in the local currency is valued at the forward exchange rate. In forward contracts for foreign exchange, the forward rate is usually higher than the spot rate. The cost of enterprises to avoid the risk of foreign exchange rate changes is reflected in the premium.

The specific meaning is that the issuance of **exceeds the original**, which is a premium, and in layman's terms, it is**price increase.

The premium refers to the amount of money left after the various handling fees are reduced, which is the premium. That is, the money earned.

The meaning of the premium is that the issuance of ** has exceeded the original**, which is the premium.

First, the equity premium is actually the equity premium is also the actual amount received when the premium is issued, and the amount that exceeds the total par value of the **, the capital premium actually refers to the enterprise in its own enterprise development fund-raising, the investor's capital exceeds the total amount of the company's registered capital. In fact, it is actually a kind of capital investment, and capital reserve refers to the investor, or other people's investment in the enterprise attributed to the investor, and the amount invested exceeds this part of the authorized capital. Therefore, the premium of equity capital has a lot to do with capital reserve, which includes the premium of capital and the provisions and differences related to equity investment, and the capital premium is the amount of capital contribution paid by the investors of the limited liability company, which is greater than the part calculated according to the capital contribution ratio stipulated in the original contract.

Second, the specific relevant explanation is that the actual amount paid is more than the current face value or value, and in the first time, it refers to the closed capital market The buying and selling price is higher than the **unit net value of assets**, that is to say, we often say that there is a **premium, which means that there is money for surplus after deducting various ** handling fees. In fact, the equity investment project contains a lot of information and can play some role in the development of the equity investment industry.

3. Conclusion According to the relevant interpretation, the share capital premium refers to the total amount of these payments actually received when the shares are issued at a premium. In fact, it is mainly the issuance of shares at a premium, and the issuance of shares can exceed the ticket value by par amount, so this situation is actually a way for shares to raise capital by issuing **.

The meaning of this word is one of the reserves, which represents the transaction, which has exceeded some of the surface of this **, so that it will affect the daily trading of **, and then it will also lead to the **market garbled situation, and then it may also collapse completely.

It should be that the cost of the company has increased a lot, which will only lead to more benefits for the company, and will also make the development of the company better, bring more capital investment, the company has more sufficient funds to develop projects, and the value of the company has been improved.

The equity premium is the amount by which the actual amount received exceeds the total par value of the shares when the premium is issued. In fact, in layman's terms, it is: at the time of issuance, the company is more optimistic about the company, exceeding the stock price to complete the sale.

Moreover, the actual amount received at the time of the sale is much greater than the total par value of the public offering. This is known as the equity premium. To take an example to understand the words of the spine, it is:

If the ** issued was originally set to be 1 yuan of share capital, but because the company is very optimistic about its own ****, it will be issued at the time of issuance with 10 yuan. At this time, the difference of 9 yuan is the equity premium.

When this method is used to sell**, it is sold at a price that exceeds the face value**, and the face value is repaid at the end of the period. The annual rate of return is often relatively high, so that shareholders can make money. The actual interest received by the investor is the difference between the coupon interest and the repayment difference (the difference between the issuance of ** and the repayment of **).

The equity premium represents an increase in costs, and the company's earnings will also increase. This will not only make the trend better, but also make the company run more smoothly and increase the company's value. But at the same time, transactions beyond the ** itself ** will have a certain impact on the daily transactions of **, and even lead to garbled codes or crashes.

So, when we look at equity premiums, we can't just consider the benefits it brings to us.