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BRINX

05/17/11 7:25 PM

#2660 RE: Nexus1 #2659

Par value stock has no relation to market value. The par value of a stock was the share price upon initial offering; the issuing company promised not to issue further shares below par value

FLORIDAGRL

05/17/11 7:27 PM

#2661 RE: Nexus1 #2659

The nominal dollar amount assigned to a security by the issuer. For an equity security, par value is usually a very small amount that bears no relationship to its market price, except for preferred stock, in which case par value is used to calculate dividend payments.

For a debt security, par value is the amount repaid to the investor when the bond matures (usually, corporate bonds have a par value of $1000, municipal bonds $5000, and federal bonds $10,000). In the secondary market, a bond's price fluctuates with interest rates. If interest rates are higher than the coupon rate on a bond, the bond will be sold below par value (at a "discount"). If interest rates have fallen, the price will be sold above par value. also called face value or par.
Source(s):
http://www.investorwords.com/3611/par_va…