Par value is typically set at a low amount so that the corporation can pay a minimum amount in dividends to the preferred shareholders.

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Par value is a nominal value assigned to a share of stock for legal purposes, often set at a low amount to minimize corporate taxes or legal liabilities, not to determine dividend payments. Dividends are determined by the board of directors and are not directly related to the par value of the stock.

Par Value Is Typically Set at a Low Amount So