The par value of a common stock is meaningful in that it is often used to determine the fixed annual dividend.

Question

Quizplus · Accepted Answer

The par value of a common stock is a nominal value assigned to each share by the issuing company, but it is not used to determine the fixed annual dividend. The dividend amount is determined by the company's board of directors based on various factors such as profits, cash flow, and growth opportunities.

The Par Value of a Common Stock Is Meaningful in That