Common Stock Par Value Definition

Below please find a definition of “Common Stock Par Value”

Financial Analysis Training & Glossary TermsCommon Stock Par Value:

(1) For bonds, the amount that the issuer agrees to pay at the maturity date. Also called the maturity value or face value of a bond.

(2) For common stocks, an arbitrary dollar amount assigned to each share by the company’s charter.

Par value has little or no impact on the actual market value of a security. However, it is important in the case of preferred stocks and bonds, since the preferred dividend and interest are often based on the par value assigned to each issue. For example, an 8% bond is a promise to pay that percentage of the bond’s par (100% of face value) value annually.

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