Like bonds, the par value on a common stock is used as a basis for determining its fixed dividend.

Question

Quizplus · Accepted Answer

Common stock does not have a fixed dividend. The dividend paid on common stock is determined by the company's board of directors and can vary based on the company's performance and financial position. Par value on common stock is simply an arbitrary amount assigned by the company upon issuance and has no bearing on the stock's dividend payments.

Like Bonds, the Par Value on a Common Stock Is