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Par value definition is - par. Also, par value still matters for a callable common stock: the call price is usually either par value or a small fixed percentage over par value. This was far more important in unregulated equity markets than in the regulated markets that exist today,[when?] The par value of a share is the value stated in the corporate charter below which shares of that class cannot be sold upon initial offering; the issuing company promises not to issue further shares below par value, so investors can be confident that no one else will receive a more favorable issue price. "Over par" and "Under par" redirect here. Additionally, the company's board approved a regular quarterly cash dividend of USD12.50 per share on its 5.00% mandatory convertible preferred stock, Series A. announced that its board of directors has determined to effect a one-for-eight reverse stock split of the company's Class A common shares, This share split entails the subdivision of each outstanding common share in the company with a, Dictionary, Encyclopedia and Thesaurus - The Free Dictionary, the webmaster's page for free fun content, A general relationship between prices of bonds and their yields, Gemini buys $43m in mortgage notes tied to three New York City hotels, Morgan Keegan top underwriter in south. For example, if you are earning 6% annual interest on a bond with a par value of $1,000, that means you receive 6% of $1,000, or $60. Par value is a per share amount that will appear on some stock certificates and in the corporation's articles of incorporation. Can you spell these 10 commonly misspelled words? Britannica.com: Encyclopedia article about par value. Many common stocks issued today do not have par values; those that do (usually only in jurisdictions where par values are required by law) have extremely low par values (often the smallest unit of currency in circulation), for example a penny (USD$0.01) par value on a stock issued at USD$25.00/share. While the par value of a bond typically remains constant for its term, its market value does not. (Banking & Finance), Nikko Asset to redeem MMFs that have fallen below par value, The pricing of risky corporate debt to be issued at par value, U.S. exchange rate policy: Bretton Woods to the present, Fortive's board to pay dividends on its common & preferred stock, Global Ship Lease announces one-for-eight reverse stock split, Azerbaijani Finance Ministry to auction manat bonds, Vostok New Ventures reports on resolutions as special general meeting. This information should not be considered complete, up to date, and is not intended to be used in place of a visit, consultation, or advice of a legal, medical, or any other professional. The certificate is issued by the lender and given to a borrower or by a corporate issuer and given to an investor. A bond selling at par is priced at 100% of face value. All content on this website, including dictionary, thesaurus, literature, geography, and other reference data is for informational purposes only. Par value is also used to calculate legal capital or share capital. where stock issuance prices must usually be published. Par is also the basis on which the interest you earn on a bond is figured. Par value is the face value of a bond. Par value -- an antiquated legal and accounting concept -- is still mandated by the corporation laws of some states. The par value of stock remains unchanged in a bonus stock issue but it changes in a stock split. Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Delivered to your inbox! Recent Examples on the Web The move was so aggressive and sparked a rally that was so powerful and broad-based that today those bonds are all the way back up near par value, and Surgery Partners was able to raise another $120 million from loan investors earlier this month. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. Par value, in finance and accounting, means stated value or face value. Please tell us where you read or heard it (including the quote, if possible). Par value is more commonly used with bonds than with stocks. Par value is the face value, or named value, of a stock or bond. That is, a bond may trade at a premium, or more than par, or at a discount, which is less than par, in the secondary market. Send us feedback. Even in jurisdictions that permit the issue of stock with no par value, the par value of a stock may affect its tax treatment. Thus, par value is the nominal value of a security which is determined by the issuing company to be its minimum price. https://financial-dictionary.thefreedictionary.com/par+value, "The acquisition of these performing notes at a discount to, The firm served as book-running manager on 444 issues equating to a, An Alabama corporation may set its stock's, exchange rate policy was the maintenance of a fixed. Par Value is the nominal or face value of a bond, share of stock, or coupon as indicated on a bond or stock certificate. Test Your Knowledge - and learn some interesting things along the way. The term "at par" is also used when two currencies are exchanged at equal value (for instance, in 1964, Trinidad and Tobago switched from the British West Indies dollar to the new Trinidad and Tobago dollar, and that switch was "at par", meaning that the Central Bank of Trinidad and Tobago replaced each old dollar with a new one). Most jurisdictions do not allow a company to issue stock below par value. “Par value.” Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-webster.com/dictionary/par%20value. These example sentences are selected automatically from various online news sources to reflect current usage of the word 'par value.' By Stephen Fishman, J.D. With stocks, the par value, which is frequently set at $1, is used as an accounting device but has no … How to use a word that (literally) drives some pe... Name that government! In accounting, the par value allows the company to put a de minimis value for the stock on the company's financial statement. Par value is the face value, or named value, of a stock or bond. With stocks, the par value, which is frequently set at $1, is used as an accounting device but has no relationship to the actual market value of the stock. For example, Delaware permits the issue of stock either with or without a par value, but by choosing to assign a par value, a corporation may significantly reduce its franchise tax liability.[1]. The move was so aggressive and sparked a rally that was so powerful and broad-based that today those bonds are all the way back up near, With a humped green that can send even well-placed approach shots scurrying away from the flag, Pebble’s 14th is the hardest hole, relative to a typical hole of its distance and, One class of preferred shares, for example, closed Monday at $15.70, well below their, But with the adoption of stricter rules on money markets, including repricing of shares below their, Consider what’s going on with MBIA the parent of bond insurer National, which insures about $4 billion in, Post the Definition of par value to Facebook, Share the Definition of par value on Twitter. Par can also refer to a bond's original issue value or its value upon redemption at maturity. Subscribe to America's largest dictionary and get thousands more definitions and advanced search—ad free! Instead of par value, some U.S. states allow no-par stocks to have a stated value, set by the board of directors of the corporation, which serves the same purpose as par value in setting the minimum legal capital that the corporation must have after paying any dividends or buying back its stock. Or something like that. “Par value,” also called face value or nominal value, is the lowest legal price for which a corporation may sell its shares. (Some states may require a corporation to have a par value while others states do not require a par value.) Par value, in finance and accounting, means stated value or face value. Learn a new word every day. (Par value can also refer to an amount that appears on bond certificates.) Par value of shares also known as the stated value per share is the minimal shares value as decided by the company which is issuing such shares to the public and the companies then will not sell such type of shares to the public below the decided value. Accessed 14 Oct. 2020. No-par stocks have "no par value" printed on their certificates. From this come the expressions at par (at the par value), over par (over par value) and under par (under par value). The shares in a corporation may be issued partly paid, which renders the owner of those shares liability to the corporation for any calls on those shares up to the par value of the shares. What made you want to look up par value? From this come the expressions at par (at the par value), over par (over par value) and under par (under par value). For the golf term, see, https://en.wikipedia.org/w/index.php?title=Par_value&oldid=978880566, All articles with vague or ambiguous time, Creative Commons Attribution-ShareAlike License, This page was last edited on 17 September 2020, at 13:39. The market price is based on changes in the interest rate, the bond's rating, or other factors. The par value of stock has no relation to market value and, as a concept, is somewhat archaic.[when?] But with bonds, par value, usually $1,000, is the amount you pay to purchase at issue and the amount you receive when the bond is redeemed at maturity. With bonds, the par value is the amount of money that bond issuers agree to repay to the purchaser at the bond's maturity…

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