Legal Definitions - Par-value stock

Par-value stock is a type of stock that has a fixed face value, also known as par value, assigned to each share. This value is determined by the company issuing the stock and is usually very low, such as $0.01 or $0.10 per share. The par value has no relation to the market value of the stock.

For example, if a company issues 1,000 shares of par-value stock with a par value of $0.10 per share, the total par value of the stock would be $100. However, the market value of the stock could be much higher or lower than this amount.

Par-value stock is not commonly used today, as most companies issue no-par value stock or stock with a very low stated value. The par value of a stock is mainly used for legal and accounting purposes, such as determining the minimum legal capital requirements for a corporation.