Par value of a stock refers to the:
A) Market value of the stock on the date of the financial statements.
B) Issue price of the stock.
C) Dividend value of the stock.
D) Maximum selling price of the stock.
E) Value assigned per share by the corporate charter.

Question

Quizplus · Accepted Answer

Par value of a stock refers to the value assigned per share by the corporate charter. It is a nominal value and does not reflect the true value of the stock in the market. The par value is generally very small and is mainly used for legal and accounting purposes, such as determining the minimum amount of capital that must be retained by the company.

Par Value of a Stock Refers to The