Fannie Mae-No Politics (FNMA)

[Barrario]

Understanding No-Par Value Stock
Companies may find it beneficial to issue no-par value stock because doing so gives them the flexibility to set higher prices for future public offerings and it results in less liability to shareholders if the stock should dramatically drop. Because of the known fluctuations in pricing associated with the stock market, investors typically do not consider a par, or written face value, necessary prior to purchasing a particular investment. In addition, the production of stocks with a face value may result in legal liabilities regarding the difference between the current going rate and the par value assigned to the stock making them a less attractive option for stock issuers.