The par value of common stock is rarely equal to its market value on the date the stock is issued.

Question

Quizplus · Accepted Answer

The par value of common stock is the minimum price at which a company is allowed to sell its shares. Market value, on the other hand, is determined by the supply and demand of the stock in the market. It is based on the perceived value of the company and its future prospects. Therefore, it is unlikely that the par value of common stock will be equal to its market value at the time of issuance.

The Par Value of Common Stock Is Rarely Equal to Its