When someone talks about \u201cpar value,\u201d they\u2019re referring to the nominal or face value of a security, such as a bond or share of stock. It\u2019s the minimum value that a security can have.<\/p>\n
The par value of a bond is the amount that the bond issuer promises to pay back when the bond matures. For stocks, the par value is often an arbitrary amount\u2014the minimum authorized amount that a publicly-traded company can issue. The most common par value is $0.01 per share. <\/p>\n
In the world of business and finance, par value is used to calculate several important figures, such as dividend payments. It\u2019s also used by auditors and accountants to determine if a company has sufficient capital. <\/p>\n
Let\u2019s say that ABC Company wants to raise money by issuing $10 million worth of shares of stock. The par value of the shares could be set at $0.01 per share. This means ABC Company would need to issue at least 1 billion shares of stock to raise the $10 million. <\/p>\n
It\u2019s also important to note that par value and the actual market value of a stock aren\u2019t always the same. Companies can set the par value of their stock to be substantially lower than the actual market value. This lower figure can help the company reduce its liabilities and appear more attractive to investors.<\/p>\n
Simply put, par value is the stated value of a security. It\u2019s the minimum value that a company can use to calculate dividends and liabilities. Though par value and the actual market value of a security aren\u2019t always the same, par value does have an important role to play in the world of business and finance.<\/p>\n","protected":false},"excerpt":{"rendered":"
When someone talks about \u201cpar value,\u201d they\u2019re referring to the nominal or face value of a security, such as a bond or share of stock. It\u2019s the minimum value that a security can have. The par value of a bond is the amount that the bond issuer promises to pay back when the bond matures. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-3554","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\n\t\t\n