Question

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In general, the term “par value,” also called face value or nominal value, is the lowest legal price for which a corporation may sell its shares. It has nothing to do with how much a corporation’s shares are actually worth or are sold for.

Group of answer choices

In general, the term “par value,” also called face value or nominal value, is the lowest legal price for which a corporation may sell its shares. It has nothing to do with how much a corporation’s shares are actually worth or are sold for.

A. True

B. False

Answer 1

Ans - TRUE

Par value is the minimum value of a single share that is assigned by the issuing company. And since par value is basically the smalled possible value of a share, therefore it has no relevance on the value of stock at which it is sold in the market. All value over and above the nominal value of a share at which it is issued by a company is referred to as the premium collected on issuance of shares. The par value itself has little relation to the market value of the shares.

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