Measure ad performance. Select basic ads. Create a personalised ads profile. Select personalised ads. Apply market research to generate audience insights. Measure content performance. Develop and improve products. List of Partners vendors. Your Money. Personal Finance. Your Practice. Popular Courses. Stocks Value Stocks. Table of Contents Expand. Par Value Stock. No-Par Value Stock. Special Considerations. Par Value Stock vs. Key Takeaways A par value for a stock is its per-share value assigned by the company that issues it and is often set at a very low amount such as one cent.
A no-par stock is issued without any designated minimum value. Neither form has any relevance for the stock's actual value in the markets. Unlike a stock, a bond has a real par value. The bond is worth its par value at maturity.
Compare Accounts. The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace. Often, it is the price at which a corporation's initial shares are sold to the public and it is a promise of ensured value in that the corporation will not issue additional shares at a price lower than that.
In some cases, corporations do not bother with par value at all or simply assign a very small par value for convenience. Par value has little to no impact on shareholders except incidentally perhaps when shares are initially offered to the public. Par value has no impact on the market prices of stock shares that most shareholders need to purchase them at, since those prices are determined by the market forces of demand and supply for those shares.
Par value has no impact on dividends received by the shareholders because dividends are calculated based on the number of shares rather than their value. Furthermore, par value has no impact on the changes in value of shares held by investors since those too are determined by market demand and supply. Alan Li started writing in and has seen his work published in newsletters written for the Cecil Street Community Centre in Toronto. A company may be required to have a par value for each share of stock issued, depending on the state in which a business is incorporated.
Some states allow a company to issue shares without a par value. If a company sets par value per share to a very low value, such as 1 cent, it can minimize the importance of par value because of the insignificant amount of reserves it must retain. If you issued shares for more than par value, the money you received above par value is called additional paid-in capital. You must report par value separately from additional paid-in capital on your balance sheet.
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