Based on tradition, the original inhabitants of Abuja lived at the base of the rock for centuries without being conquered. Aso Koro, which was the name of one of the local areas, means ‘people of victory’. And today, the term Aso Rock is used to refer to the physical structure of the most imposing rock in Abuja and a symbol of government power as well. Abuja shares borders on the north with Kaduna State, on the southeast with Nasarawa State, on the southwest with Kogi State, and on the west with Niger State. Over the years, Abuja has witnessed huge population growth which has led to the emergence of satellite towns such as Karu, Nyana, Suleja, Gwagwalada, and Kuje.
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- A company’s dividend history and expectations can influence its dividend policy and its capital surplus.
- Wike’s appointment to this crucial position in the Nigeria capital demonstrates the importance of Abuja in the nation’s political landscape.
- We will also provide some examples of companies that have revalued their assets and how it impacted their capital surplus.
- The Federal Capital Development Authority (FCDA) was also set up as the organization responsible for developing the city.
- This has included investments in artificial intelligence, autonomous vehicles, and other cutting-edge technologies.
Managing Capital Surplus
The Capitol, like many state capitol buildings, has a rounded dome that is somewhat reminiscent of the top of an “o,” which may help some remember the “o” spelling. Note that the word capital as used to describe an uppercase letter, like in the phrase capital “C”, utilizes capital. Fortunately, some developers of the Mpape district who have building plan approval and have started building maintain their plots and allocations and are covered in the Maitama II District layout. It is not clear though if a fresh allocation bearing Maitama II District has been issued to this set of allottees. The tallest building in this district is the Radio House located in the Area 11 sector, which houses the Federal Ministry of Information and Communications, the Federal Radio Corporation of Nigeria (FRCN) and Voice of Nigeria (VON). The Nigerian Television Authority (NTA) stations and corporate headquarters are also in Garki.
- Microsoft, for instance, has used its capital surplus to pay down debt, even when it was not due, to maintain a strong balance sheet.
- However, a company that has a low debt-to-equity ratio and a low cost of capital may want to use its capital surplus to pay dividends to its shareholders or buy back its own shares.
- Your capital surplus is not a fixed or static number, but a dynamic and relative measure of your financial position.
- Capital surplus is more than just an accounting entry; it is a multifaceted component of a company’s financial health that affects decisions and perceptions across the corporate landscape.
- Capital surplus reflects how much money you have left over after paying off your debts, and how much you can invest in growing your business.
- The city’s strategic location has made it a melting pot of Nigeria’s numerous ethnic groups, fostering a unique blend of cultures.
When the buyer purchased the shares at a value that is much higher than the par value, generating a capital surplus that shows up on the balance sheet. The capital surplus is the amount of money that is earned by the company when they sell shares at a value that is higher than the par value. A capital deficit, on the other hand, refers to the equity that turns negative, indicating that the total value of the liabilities is higher than the value of the company’s assets. A lot of people tend to believe capital surplus is another word for retained earnings, but that couldn’t be further from the truth. Retained earnings are profits made by the company over time, while capital surplus is the excess amount of money that the company gets when selling shares over par value. Capital surplus is an important measure for businesses as it reflects the additional value investors are willing to pay for shares beyond their face value, indicating the market’s confidence in the company’s future prospects.
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This plan was done by the urban city planners for ease and coordination of developmental efforts. Abuja Municipal Area Council (AMAC) holds Nigeria’s political and administrative capital. It is an urbanized area council with a host of notable districts such as Garki, Jabi, Asokoro, Wuye, Utako, and Gwarinpa. The Federal Capital Territory Administration (FCTA) is the ministry responsible for the management and administration of Abuja and the Federal Capital Territory of Nigeria.
Moving the capital inland was also part of a strategy to diversify Nigeria’s economy. By shifting focus away from the oil-rich coastal regions, the government hoped to stimulate development in other areas. Abuja’s construction and ongoing expansion have created new economic opportunities beyond the traditional oil sector. The urban agglomeration centred upon Abuja had a population estimated at 3,770,000 in 2022.3 The city has a large and growing immigrant community consisting mainly of nationals from the ECOWAS sub-region. The city has been undergoing a rapid pace of physical development over the last fifteen years. Maitama II District Cadastral Zone A10 is a new district created by the FCT administration of Muhammed Bello in 2018.
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Its carefully planned layout and iconic structures, such as the National Mosque and the Nigerian National Christian Centre, reflect the nation’s commitment to both development and cultural diversity. As the seat of government and a growing economic hub, Abuja continues to shape Nigeria’s political and social landscape. As you delve into this article, you’ll gain insight into Abuja’s history, infrastructure, and significance as the seat of Nigeria’s federal government. Join us on a journey through the wide boulevards and iconic landmarks that define this dynamic capital city. In 1979, a master plan was created for Abuja to be developed in five development phases covering a total of 1,000 sq km and a population estimate of 3 million by the year 2010. The old town of Abuja was renamed ‘Suleja’ after the then Emir Suleiman Barau.
If management turns out to be too pessimistic, the reserves can be reversed. The word surplus implies the difference between the actual value of the share (par value) and the value at which the share is being sold. Suppose you bought a few shares at $10 per share, but the actual value of the share is capital surplus $1, then the difference would be $9. Costs incurred during the issuance of shares, such as underwriting fees and legal expenses, are deducted from APIC. This ensures that the net amount reflects the actual contribution from shareholders. Imagine “Innovative Tech Ltd.” issues 1 million shares with a par value of $1 per share but sells them at $5 per share.
By carefully evaluating the various uses of surplus capital, a company can make informed decisions that support its long-term success and stability. Enhancing shareholder value is often a priority, and capital surplus can play a role here. A common method is through share buybacks, which can increase the stock price by reducing the number of shares outstanding, as seen with a multinational corporation buying back 5% of its shares, signaling confidence to the market. In the realm of corporate finance, the excess of a company’s assets over its stated capital is often earmarked as a buffer for future uncertainties or strategic initiatives.
Companies must tread carefully, ensuring that every decision regarding these funds is transparent, justifiable, and in alignment with both legal mandates and shareholder expectations. In other words, a capital surplus tells you how much of the company’s shareholders’ equity is not due to retained earnings. GreenEnergy Corp. is a renewable energy company that decides to go public through an initial public offering (IPO). The company issues 1 million shares of common stock with a par value of $0.10 per share. During the IPO, the shares are offered to investors at a price of $20.00 per share, significantly higher than the par value. In summary, capital surplus is a vital component of a company’s equity structure, reflecting the additional value investors attribute to the company’s shares.
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On the other hand, retained earnings are the cumulative profits that a company has reinvested in itself rather than distributing as dividends to shareholders. This reinvestment is a testament to a company’s maturity and its management’s belief in the business’s ability to generate future returns. Retained earnings can be a war chest for future expansion, innovation, or a buffer during financial downturns.