<p>If <strong>existing shares</strong> are sold, then the transaction does not involve the company -it is between the old shareholder and the new shareholder. The only thing that the company gets, is a new shareholder.  </p>

<p>If on the other hand this is <strong>issuance of new stock</strong>, then the new shareholder gets the paper and the company the green paper -the whole of it.  </p>

<p>Your second question ("how the company is affected...") is too broad and unclear to be easy to answer. Is this in the short-run? Long-run? In relation to its operations? In relation to its competitive position? As regards its credit rating? </p>

CC BY-SA 3.0
2014-12-14T12:54:06.827Z
I think you're being a tad harsh here Alecos. The nuts and bolts of how the financial system operates are a necessary part of understanding how the economy works.
Lumi
CC BY-SA 3.0
2014-12-14T13:28:38.653Z
@Lumi The question has nothing really to do with how the financial system works: it comes from fundamental _property rights_, of which all people have an intuitive understanding: the shares of a company is the property of the shareholders, not of the company itself, does it take economic training or professional experience to realize that? So if _you_ sell something, wouldn't it sound absurd  that _somebody_ else gets the proceeds? As for your suggested edit in my answer, I will leave others to decide, and if they approve it, I won't object. Thanks for taking an interest here, this is good.
Alecos Papadopoulos
CC BY-SA 3.0
2014-12-14T14:10:18.333Z
Alecos, it would seem that it wasn´t intuitively obvious to at least one person that shares can be issued by a company, or sold between 2 parties on a market. It´s easy as experts to forget the utter confusion attendant on being a beginner in any field.
Lumi
CC BY-SA 3.0
2014-12-14T14:19:14.820Z
@Lumi. Indeed. And the main issue is again: there are millions of such trivial questions, that can also be answered by a million web resources. How much of them are we able, and are willing, to handle? I was the one that answered this trivial question, but I don't want to see my time here spent on the likes of it progressively more and more. That's why I tried to make something out of it for the benefit of the site: answer the triviality, issue a warning, but also attempt to bring in the surface something (the second question), that can have some substance here. I wait for the OP to respond.
Alecos Papadopoulos
CC BY-SA 3.0
2014-12-14T14:25:14.900Z
Alecos, if the programming stack overflow had taken that attitude, there wouldn´t be an economics stack overflow. The approach is simple, get one good answer to a trivial question, and then bookmark that for all future similar questions.
Lumi
CC BY-SA 3.0
2014-12-14T00:47:44.077Z
2014-12-15T01:00:10.500Z
2014-12-15T01:00:10.500Z
Alecos Papadopoulos
<p>If the par value of the common stock is 5 dollars and is sold at market for 10 dollars does the company get the extra $5? Also how is the company affected by the market value going up and down? </p>

<financial-markets>
Paid in capital
Peter
# Paid in capital

(Asked by: username_0 on 2014-12-14)

If the par value of the common stock is 5 dollars and is sold at market for 10 dollars does the company get the extra $5? Also how is the company affected by the market value going up and down?

**Tags:** financial-markets


---

## 1 answers

### Answer by username_1 on 2014-12-14. Score: 2

If **existing shares** are sold, then the transaction does not involve the company -it is between the old shareholder and the new shareholder. The only thing that the company gets, is a new shareholder.

If on the other hand this is **issuance of new stock**, then the new shareholder gets the paper and the company the green paper -the whole of it.

Your second question ("how the company is affected...") is too broad and unclear to be easy to answer. Is this in the short-run? Long-run? In relation to its operations? In relation to its competitive position? As regards its credit rating?

> **Comments:**
> **username_2**: I think you're being a tad harsh here Alecos. The nuts and bolts of how the financial system operates are a necessary part of understanding how the economy works.  
> **username_1**: @username_2 The question has nothing really to do with how the financial system works: it comes from fundamental _property rights_, of which all people have an intuitive understanding: the shares of a company is the property of the shareholders, not of the company itself, does it take economic training or professional experience to realize that? So if _you_ sell something, wouldn't it sound absurd  that _somebody_ else gets the proceeds? As for your suggested edit in my answer, I will leave others to decide, and if they approve it, I won't object. Thanks for taking an interest here, this is good.  
> **username_2**: Alecos, it would seem that it wasn´t intuitively obvious to at least one person that shares can be issued by a company, or sold between 2 parties on a market. It´s easy as experts to forget the utter confusion attendant on being a beginner in any field.  
> **username_1**: @username_2. Indeed. And the main issue is again: there are millions of such trivial questions, that can also be answered by a million web resources. How much of them are we able, and are willing, to handle? I was the one that answered this trivial question, but I don't want to see my time here spent on the likes of it progressively more and more. That's why I tried to make something out of it for the benefit of the site: answer the triviality, issue a warning, but also attempt to bring in the surface something (the second question), that can have some substance here. I wait for the OP to respond.  
> **username_2**: Alecos, if the programming stack overflow had taken that attitude, there wouldn´t be an economics stack overflow. The approach is simple, get one good answer to a trivial question, and then bookmark that for all future similar questions.  

---

