Par Value For Common Stock

When a corporation s common or preferred stock has a par value corporation s balance sheet will report the total par value of the shares issued for each class of stock.

Par value for common stock. This will be shown as a separate amount in the paid in capital or contributed capital section of. In other words it is the share nominal amount 1 0 1 or 0 001 mentioned on the stock certificate at the time. A company is free to choose any amount as the par value for its share but companies mostly choose. The par value is sometimes referred to as the common stock s legal capital.

Par value is the per share legal capital of the company that is usually printed on the face of the stock certificate. Par value stock is a type of common or preferred stock having a nominal amount known as par value attached to each of its share. People who own shares of common stock in a publicly traded entity or may be considering purchasing or issuing common stock from a small private company need to. Common stock issued with par value is redeemable to the company for that amount say 1 00 per share for instance.

What is par value of share. It used to be that the par value of the common stock was equal to the amount. 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 is the face value of a bond.