The par value of common stock refers to the nominal or face value of each share of common stock issued by a company. It is the minimum price at which the stock can be sold when initially issued by the company. Par value has legal significance but is not necessarily indicative of the actual market value of the stock.<\/p>\n
The par value of common stock is essentially an arbitrary value assigned to shares for legal and accounting purposes.<\/strong> It serves as a baseline value to determine the company’s capital structure and is typically set at a very low amount, such as $0.01 or $0.10 per share. However, it is important to note that most modern companies have moved away from assigning significant par values to their stock, and many issue shares “without par value.”<\/p>\n