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Finance Dictionary and Glossary of Investment Terms
Also called the maturity value or face value; the amount that an issuer agrees to pay at the maturity date.
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.
Par value for bonds is simply the face value. Par value for stocks is an outdated concept, and although some common stock has a par value, nowadays many issues don''t even bother.
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.