The sale of common stock below par
A) is a common occurrence in most states.
B) is not permitted in most states.
C) is a practice that most stockholders encourage.
D) requires that a liability be recorded for the difference between the sales price and the par value of the shares.

Question

Quizplus · Accepted Answer

Selling common stock below par value is generally not permitted in most states because the par value represents a legal capital threshold that must be maintained to protect creditors.

The Sale of Common Stock Below Par