SIE: Par Value Of Common Stock

Taken from our SIE Online Guide

Par Value of Common Stock

In general, when it comes to common stock, par value is an accounting artifact with virtually no influence on the price of a stock. For the exam, know that for investors in common stock, the par value of a share is set arbitrarily, has no relation to market value, and thus, has little to no significance. As we shall see, however, par value is very different for both preferred stock and bonds.

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