What does the par value of a stock represent?
A)The average market value of a stock for the year to date.
B)It is a legal concept not related to the market value of a stock.
C)The amount that would be paid if a stock was purchased by the issuing company.
D)The current market value of a stock.

Question

Quizplus · Accepted Answer

The concept of par value originated at a time when it was needed to prevent stockholders from removing the contributed capital of a business.Current laws and regulations prevent this from occurring,so par value no longer has a business purpose.

What Does the Par Value of a Stock Represent