AboutPaul Henneman Expertise I can answer any questions on investment strategies. Specifically, my expertise lies in long term investment strategies designed to beat market performance while reducing risk. Not get rich quick schemes, but solid investing strategies.
Experience
Past/Present clients CBSMarketWatch, Hoovers, Multex, Yahoo Finance, Zacks, Earthlink Finance, several large institutions and hedge funds, over 30,000 subscribers to www.ValuEngine.com
Question This is not a homework question!
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Sorry, but I don't answer homework questions..
Your Question was:
Hello:
Did all stocks use to have a par value, or do all stocks still have a
par value; if so, what does "par value" represent?
I thank you for your reply.
Expert: Paul Henneman
Answer Thank you for your question!
Yes, all stocks generally have a par value. Historically, par value has been the original investment amount, usually measured per share. In more recent times par value is an assigned amount. Here is a definition from Barron's Dictionary of Financial and Investment terms:
"... it is an assigned amount (such as $1 a share) used to compute the dollar accounting value of the common shares on a company's balance sheet. Par value has no relation to market value, which is determined by such considerations as net asset value, yield, and investors' expectation of furture earnings." p. 432
Typically par value is of great concern for bonds than stocks. For bonds, the base value must be determined for the percentage interest for the bond to be paid to the holder. Preferred dividends for preferred stock holders are also usually paid as a percentage of the par value. (see page 432 for more on this).
I hope this helps. Please do not hesitate to follow up with me if I can be of any additional service,
Sincerely,
Paul Henneman
President
ValuEngine Inc
www.ValuEngine.com
