1. What is Par Value per Share?

Definition: Par value per share is the nominal or face value of a single share of stock as stated in the corporate charter.

Purpose: It represents the minimum price at which shares can be issued and is used for accounting and legal purposes.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( PV \) — Par value per share (USD)
• \( E \) — Total equity (USD)
• \( N \) — Number of shares (dimensionless)

Explanation: The total equity is divided by the number of outstanding shares to determine the nominal value of each share.

3. Importance of Par Value

Details: While par value is often minimal (sometimes $0.01), it's important for legal capital requirements and affects accounting entries for stock issuance.

4. Using the Calculator

Tips: Enter the total equity amount in USD and the number of shares issued. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Is par value the same as market value?
A: No, par value is a nominal legal value, while market value is what investors are willing to pay for the stock.

Q2: Can par value be zero?
A: Yes, many companies issue no-par value stock, though some jurisdictions require at least a minimal par value.

Q3: Why is par value usually set very low?
A: Low par value helps avoid potential legal liabilities if shares are sold below par value.

Q4: How does this relate to common vs preferred stock?
A: Preferred stock often has a higher par value than common stock, which affects dividend calculations.

Q5: Does par value change over time?
A: Typically no, unless the company undergoes a stock split or reverse split that affects the par value.