Par value of a share is defined as the nominal value printed on the stock certificate.

• A. Market value
• B. Nominal value printed on the stock certificate
• C. Net asset value
• D. Dividend rate

Answer: (B)

Par value is the face value assigned to a share—the nominal value printed on the stock certificate. This value comes from the company’s charter and historically served as the minimum price at which shares could be issued and as the basis for the company’s legal capital. Today many stocks are issued with no par value or with a very small par value, so the number often has little relation to market price. Market value is what the stock trades for in the market, not the stated face value. Net asset value is a measure of a company’s assets minus liabilities per share, and the dividend rate relates to distributions, not the per-share nominal value.