The two basic sources of stockholders' equity are paid-in capital and retained earnings. Stockholders' equity is represented by the equity stake that is held on the books by a firm's equity investors. Paid-in capital is the amount of money (capital) that is paid in by the investors when common or preferred stock being issued. Retained earnings are shown as a percentage of the net earnings that are not paid out as dividends but kept in the corny to be reinvested.
