Stock Has No Par Value
It all depends on what the market feels the company is worth.
Stock has no par value. Par value has no relation to the market value of a stock. In other words it is the share nominal amount 1 0 1 or 0 001 mentioned on the stock certificate at the time. Par value of shares also known as the stated value per share is the minimal shares value as decided by the company which is issuing such shares to the public and the companies then will not sell such type of shares to the public below the decided value. In the past companies issued shares with significant par values such as 10 00 per share leading to confusion between this arbitrarily assigned amount and the actual market value of the shares with which it has no link.
A no par value stock can still trade for tens or hundreds of dollars. What is par value of share. There is a theoretical liability by a company to its shareholders if the market price of its stock falls below the par value for the difference between the market price of the stock and the. Each one of the 10 000 bonds issued has a 1 000 par value.
A no par value stock is issued without the specification of a par value indicated in the company s articles of incorporation or on the stock certificate itself. No par value stock is shares that have been issued without a par value listed on the face of the stock certificate historically par value used to be the price at which a company initially sold its shares. Assume that clinton company issues a bond to the public worth 10m.