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July 26, 2011, 07:31:11 AM *
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Author Topic: The par value of a stock....?  (Read 8 times)
JimmerFredette
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« on: July 22, 2011, 12:19:49 AM »

A.is legally significant.
B.reflects the most recent market price.
C.is selected by the SEC.
D.is indicative of the worth of the stock.
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drmark27
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« Reply #1 on: July 22, 2011, 01:03:52 AM »

None of the above.  Stocks will typically have a par value of $0.01 or none at all.   It is set by the company itself and may represent the company's liability to shareholders should the stock take a turn for the worse.
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JoeyV
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« Reply #2 on: July 22, 2011, 06:10:31 AM »

Agree with drmark, but the least wrong answer is A.  B. is wildly not true as the par value of BRK.A could be 0.01 (I'm too lazy to look).  C is just not true as the SEC has nothing to do with it.  D is untrue as I would say the worth of a stock is something like its market value.  A. makes a little sense because a company can't pay dividends leaving it with less capital than the par value of the stock, for instance.
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jeff410
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« Reply #3 on: July 22, 2011, 03:32:32 PM »

A. is legally significant.

Its the face value of the stock, which is the value of the legal claim on the stock.
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