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2 years ago

The par value of common stock must always be equal to its market value on the date the stock is issued.

Business

1 answer:

Lemur [1.5K]2 years ago

5 0

TRUE, the par value of the common stock must always be equal to its market value on the date the stock is issued

The par value of the common stock must always equal the market price on the date the stock was issued. The issuance of common stock affects both paid-in capital and retained earnings. If the preferred stock has a par value of $50 and the dividend is estimated at 8%, the dividend per share will be $4.

Par value is the value of one share of common stock as set forth in the company's articles of incorporation. It usually has nothing to do with the actual value of the stock. In reality it is often lower. Share certificates issued against the shares purchased show the par value. When approving shares, the company can choose whether to assign a par value.

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DerKrebs [107]

Answer:

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