The par value on common stock sets the value that stockholders will receive in case of bankruptcy.

Name: The par value on common stock sets the value that stockholders will receive in case of bankruptcy.
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The par value of common stock is a nominal value assigned to the stock and does not determine the amount stockholders receive in bankruptcy. In bankruptcy, stockholders' recovery depends on the company's remaining assets after debts are paid.

The Par Value on Common Stock Sets the Value That