The par value on a common stock is used as a basis for determining its fixed dividend.

Name: The par value on a common stock is used as a basis for determining its fixed dividend.
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The par value on a common stock is a nominal value assigned to each share and has no relationship with the fixed dividend. Common stock dividends are not fixed but vary depending on the company's performance and profitability.

The Par Value on a Common Stock Is Used as a Basis