Legal Definitions - stated value

Definition: Stated value is the value of an instrument or security as shown on its face. It is the arbitrary dollar amount assigned to a stock share by the corporate charter or the principal of a bond. It is also known as par value, face amount, face value, or nominal value.

Example: A company issues 100 shares of common stock with a par value of $10 per share. The stated value of each share is $10. This means that the company has assigned a value of $10 to each share of stock.

Explanation: Stated value is the value assigned to a security by the company that issues it. In the example above, the company has assigned a par value of $10 to each share of common stock. This means that the company has determined that each share of stock is worth $10. However, the actual market value of the stock may be higher or lower than the par value. The par value is important because it sets a minimum price for the stock. The price of the stock cannot be lower than the par value.