1. What is a Par Value Calculator?

Definition: This calculator determines the par value per share of stock by dividing the total par value by the number of shares outstanding.

Purpose: It helps investors and corporations understand the nominal value of each share of stock as stated in the corporate charter.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• Par Value — Nominal value per share ($/share)
• Total Par — Total par value of all shares ($)
• Shares — Number of shares outstanding

Explanation: The total par value is divided by the number of shares to determine the par value per individual share.

3. Importance of Par Value Calculation

Details: Par value represents the minimum price at which shares can be issued and is important for accounting and legal purposes, though it's often set very low for common stock.

4. Using the Calculator

Tips: Enter the total par value in dollars and the number of shares outstanding. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is par value?
A: Par value is the nominal or face value of a stock as stated in the corporate charter, not its market value.

Q2: Why is par value important?
A: It determines the minimum legal capital per share that must remain in the company and cannot be paid out as dividends.

Q3: What's a typical par value?
A: Many companies set par value very low (e.g., $0.01 per share) for common stock to avoid legal issues with selling below par.

Q4: Is par value the same as market value?
A: No, market value is determined by supply and demand, while par value is an arbitrary legal amount.

Q5: Where do I find total par value?
A: It's listed in the equity section of a company's balance sheet as "common stock" or "preferred stock" at par value.