When Tong Su purchased 500 shares of preferred stock in the Vibrates Corporation, his certificate indicated the stock had a par value of $50 per share. This means that Tong Su:

Question

Quizplus · Accepted Answer

The par value of a stock represents the minimum amount at which it can be issued and does not necessarily reflect its current market value. Therefore, Tong Su's shares may be worth more or less than $50 per share at any given time. However, the par value can be used to calculate dividends, and Tong Su may receive dividends based on the $50 par value per share.

When Tong Su Purchased 500 Shares of Preferred Stock in the Vibrates