no-par stock

Thân thiện

A company issues no-par stock to raise capital.

Definition

Noun: - Capital stock without a designated face value per share: This is a type of corporate stock where the company's charter and the stock certificates do not assign a specific par value (nominal or face value) to each share. Its value is determined by the market and the company's financial standing.

Usage

• Primary Usage: Used in finance and corporate law to describe a class of equity shares.
  • The company issued no-par stock to avoid potential legal liabilities associated with setting a par value.
  • Investors should understand that the price of no-par stock is not tied to an arbitrary face amount.

Advanced Usage

• Accounting Treatment: The entire amount received from the sale of no-par stock is typically recorded as capital in the company's books, providing more flexibility.
  • With no-par stock, the entire issuance proceeds are credited to the common stock account.

Variants and Related Words

• No-par-value stock: A full synonym for no-par stock.
• Par value stock: The contrasting term for stock that has a stated face value per share.
• Stated value stock: Sometimes, a board of directors may assign a "stated value" to no-par stock for accounting purposes, which functions similarly to par value.

Synonyms

• No-par-value share
• Non-par stock

Related Concepts

• Paid-in capital: The capital contributed by shareholders through the purchase of stock, a key account affected by no-par stock issuance.
• Market value: The price at which the stock trades, which is the primary value indicator for no-par stock.

Học thuật

Noun

1. stock with no par value specified in the corporate charter or on the stock certificate

Từ đồng nghĩa

• no-par-value stock