When a corporation is first chartered, it is authorized by the state to issue up to a stated number of shares of common stock, each of which carries a specified
A) par value
B) tender offer
C) dividend payment
D) size effect

Question

Quizplus · Accepted Answer

When a corporation is first chartered, it is authorized by the state to issue a stated number of shares of common stock, each of which carries a specified par value. The par value is the minimum price at which the stock can be sold, and it is often set at a nominal amount such as $0.01 or $0.10 per share. This value has no relation to the market value of the stock and is primarily used to calculate legal capital requirements.

When a Corporation Is First Chartered, It Is Authorized by the State