The nominal dollar amount assigned to a security by the issuer. For an equity security, par value is usually a very small amount that bears no relationship to its market price, except for preferred stock, in which case par value is used to calculate dividend payments. For a debt security, par value is the amount repaid to the investor when the bond matures (usually, corporate bonds have a par value of $1000, municipal bonds $5000, and federal bonds $10,000). In the secondary market, a bond's price fluctuates with interest rates. If interest rates are higher than the coupon rate on a bond, the bond will be sold below par value (at a "discount"). If interest rates have fallen, the price will be sold above par value. also called face value or par.
Related information about par value:
- Par value - Wikipedia, the free encyclopedia
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1. The face value of a bond. 2. A dollar amount that is assigned to a security when representing the value contributed for each share in cash or goods.
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We explain the definition of Par Value, provide a clear example of how it works and explain why it's an important concept in business, finance & investing.
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Definition of par value: The nominal dollar amount assigned to a security by the issuer. For an equity security, par value is usually a very small amount that bears ...
- What is par value? definition and meaning - BusinessDictionary.com
Definition of par value: Apparent worth or the nominal value shown on the principal ('face' or 'head') side of a bill of exchange, currency, security (stock/ share, ...