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Finance Dictionary and Glossary of Investment Terms
Par value
Definition 1.
Also called the maturity value or face value; the amount that an issuer agrees to pay at the maturity date.
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Definition 2.
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.
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Definition 3.
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 Par value for stocks is an outdated concept, and although some common stock has a par value, nowadays many issues don''t even bother.
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Definition 4.
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.
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