What is Par Value as it refers to stock on a balance sheet ?
Par value is a per-share value arbitrarily assigned to an issue of common stock for accounting and financial statement purposes. Par Value is the face or nominal value of a security. A dollar amount is assigned to a share of common stock by the corporation's charter. Many corporations do not assign a par value to new issues. For preferred shares or bonds, par value has importance because it signifies the dollar value on which the dividend/interest is figured and the amount to be repaid upon redemption. Preferred dividends are usually expressed as a percentage of the stock's par value. The interest on bonds is expressed as a percentage of the bond's par value.
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