2nd October 2019

accountingcoach
11

How is par value of common stock determined?

Par value is a per share amount appearing on stock certificates. It is also an amount that appears on bond certificates. In the case of common stock the par value per share is usually a very small amount such as $0.10 or $0.01 or $0.001 and it has no connection to the market value of the share of stock.

Similarly, it is asked, what is the par value of a share?

A: People often get confused when they read about the "par value" for a stock. In general, par value (also known as par, nominal value or face value) refers to the amount at which a security is issued or can be redeemed. For example, a bond with a par value of $1,000 can be redeemed at maturity for $1,000.

What does par value of shares mean?

Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. Par value for a share refers to the stock value stated in the corporate charter.

What is the stated value of the common stock?

A stated value is an amount assigned to a corporation's stock for internal accounting purposes when the stock has no par value. Stated value has no relation to market price.
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