The cash proceeds from issuing par value stock may be equal to or greater than, but not less than par value.

Question

Quizplus · Accepted Answer

This statement is true. Par value is the minimum legal amount for which a share of stock can be issued. The company cannot issue the stock for less than par value, but they can sell it for an amount equal to or greater than par value. Any additional amount received above the par value is often called the "premium" and is recorded as additional paid-in capital on the company's balance sheet.

The Cash Proceeds from Issuing Par Value Stock May Be