Par value stock
Par value stock is capital stock to which the charter has assigned a value per share. Years ago, par value determined the legal capital per share that a company must retain in the business for the protection of corporate creditors; that amount was not available for withdrawal by stockholders. Thus, in the past, most states required the corporation to sell its shares at a par or above.
Category: Accounting & Auditing
Previous: ← Authorized stock
Next: No-par value stock →
More from this Section
- Check
A check is a written order signed by the depositor directing the bank to pay a specified ... - Drawings
Drawings refer to the withdrawal of cash or other assets from an unincorporated business ... - Retained earnings statement
The retained earnings statement is a financial statement that shows the changes in retained ... - Return on common stockholders’ equity
Return on common stockholders’ equity refers to a measure of profitability that shows ... - Cost principles
The cost principles, also known as the historical cost principle is one of the basic underlying ...