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Par value

Par value is the carrying value of stock on the company's books. It usually ranges from a dollar down to a few pennies (or less) and sometimes is listed at zero.

Expanded Definition

This is basically just an accounting number to assign "some" value to the shares of stock that have been issued.

When a company sells stock, the cash it receives is split between this account on the balance sheet and the "contributed cash" or "cash in excess of par" account. For instance, if the par value is $0.50 per share and the company sells 10,000 shares for $10.00 each, then the par value account would increase by $5,000 while the contributed cash account would increase by $95,000 (minus whatever costs the company incurred to sell those shares).

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