Par, also referred to as par value or nominal value, is the face value of a bond or the stock value stated in the corporate charter and noted in the stock certificate. Each share of stock receives a par value, representing the amount of capital that each shareholder contributes.
Par value was created as a measure to protect the public against stock sale frauds. During the course of a corporation, the par value cannot be reallocated, and new shares cannot be sold below par value.
Par value of a bond or fixed-income instrument is crucial since it influences the maturity value and the cash amount of coupon payments. The most common denomination of a bond is usually $1,000 par value (or to a lesser degree $100).
[Last updated in November of 2023 by the Wex Definitions Team]
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