Par value is not necessarily the actual price at which common stock is issued by the firm,but it does constitute the maximum legal liability per share in the event of bankruptcy.

Question

Quizplus · Accepted Answer

Par value does not determine the maximum legal liability per share in the event of bankruptcy; it is a nominal value assigned to stock for legal purposes and does not reflect the market value or the price at which shares are issued.

Par Value Is Not Necessarily the Actual Price at Which