What is the term for the value assigned to a share of stock that is printed on the stock certificate?

What is the term for the value assigned to a share of stock that is printed on the stock certificate?

• A. Market value
• B. Face value
• C. Par value
• D. Intrinsic value

Answer: (C)

The term for the value assigned to a share of stock that is printed on the stock certificate is known as par value. Par value represents the nominal or stated value of the stock as defined in the corporate charter. It is essentially an accounting value and is usually set at a very low amount. This value can be important in determining the legal capital of a corporation, which is the amount that cannot be distributed to shareholders as dividends. In contrast, market value refers to the current trading price of the stock in the marketplace, which can fluctuate based on supply and demand. Face value is a term more commonly associated with bonds rather than stocks and refers to the amount paid back to the bondholder at maturity. Intrinsic value refers to the perceived or calculated value of an asset, based on fundamental analysis, rather than what it currently trades for in the market. Understanding the concept of par value is essential in finance, as it helps in comprehending how stocks are valued from a corporate perspective.

The term for the value assigned to a share of stock that is printed on the stock certificate is known as par value. Par value represents the nominal or stated value of the stock as defined in the corporate charter. It is essentially an accounting value and is usually set at a very low amount. This value can be important in determining the legal capital of a corporation, which is the amount that cannot be distributed to shareholders as dividends.

In contrast, market value refers to the current trading price of the stock in the marketplace, which can fluctuate based on supply and demand. Face value is a term more commonly associated with bonds rather than stocks and refers to the amount paid back to the bondholder at maturity. Intrinsic value refers to the perceived or calculated value of an asset, based on fundamental analysis, rather than what it currently trades for in the market. Understanding the concept of par value is essential in finance, as it helps in comprehending how stocks are valued from a corporate perspective.