1. What is Par Value Per Share?

Definition: Par value per share is the nominal or face value assigned to each share of stock by the company's charter.

Purpose: It represents the minimum price at which shares can be issued and is used for accounting and legal purposes.

2. How Does Par Value Work?

The par value is simply the assigned value per share:

Where:

• Par Value — The nominal value per share ($/share)
• Assigned Value — The value set by the company in its charter

Explanation: The company determines this value when incorporating and it remains constant unless amended.

3. Importance of Par Value

Details: While par value has little relation to market price, it's important for:

• Legal capital requirements
• Accounting for stock issuance
• Determining minimum legal capital

4. Using the Calculator

Tips: Simply enter the assigned value per share that was determined in your company's charter documents.

5. Frequently Asked Questions (FAQ)

Q1: Is par value the same as market value?
A: No, par value is nominal and fixed, while market value fluctuates based on supply and demand.

Q2: What's a typical par value?
A: Many companies set a low par value (e.g., $0.01) to minimize legal capital requirements.

Q3: Can par value be zero?
A: Some jurisdictions allow "no-par" stock, but most require at least a nominal par value.

Q4: How does par value affect stock issuance?
A: Shares cannot be issued below par value, but can be issued above it (the difference is "paid-in capital").

Q5: Can par value change after issuance?
A: Only through formal corporate actions like stock splits or charter amendments.