par value

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par value

The bond certificate clearly states its par value of $1,000.

Definition

Noun: - The nominal or face value of a security: The value assigned to a share of stock or a bond by the company that issues it. This value is printed on the certificate and represents a formal accounting value, not the price for which it trades on the open market.

Usage

Par value is a legal and accounting concept used primarily for corporate shares and bonds. - For bonds, par value (often $1,000) is the amount the issuer agrees to repay the bondholder at maturity. - For stocks, par value is a minimal, arbitrary amount (often $0.01 or $1.00 per share) set in a company's charter, which has little relation to the stock's market price. It is used for accounting purposes, such as recording the stock's issuance in the company's balance sheet.

Examples

  • For Bonds:

    • The corporate bond was issued at its par value of $1,000.
    • If a bond's market price falls below its par value, it is said to be trading at a discount.

  • For Stocks:

    • The company's common stock has a par value of $0.01 per share.
    • The par value of the preferred shares is $100, but they are currently trading for $105 on the exchange.
Advanced Usage
  • "Stated value": A similar concept sometimes used interchangeably with par value for corporate shares, representing a nominal value assigned for accounting.
  • "No-par value stock": Shares issued without any designated par value, which is permitted in many jurisdictions. The entire amount received from the sale is recorded as capital.
Variants and Related Words
  • Face value: Often used synonymously with par value, especially for bonds and currency.
  • Nominal value: Another term for par value, emphasizing its stated, formal nature as opposed to its real market value.
Synonyms
  • Face value
  • Nominal value
  • Stated value
Related Idioms and Phrases
  • "At par": A security trading at a price equal to its par value.
    • The new bond issue is trading at par.
  • "Above par" / "Below par": Trading at a price higher or lower than its par value, respectively.
    • Due to high demand, the bond is selling above par.
    • The company's financial troubles caused its bonds to trade below par.
par value

The bond certificate clearly states its par value of $1,000.

Noun
  1. the value of a security that is set by the company issuing it; unrelated to market value

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