Par can also refer to a bond's original issue value or its value upon redemption at maturity.
This certifies that Leonard S. New York Time on the Expiration Date as defined below. This Option and all rights hereunder, to the extent not exercised in the manner set forth herein shall terminate and become null and void on the Expiration Date. In the event that the Holder does not exercise this Option pursuant to the terms of this Option, then this Option shall expire, be cancelled, and be null and void.
Stock[ edit ] The par value of stock has no relation to market value and, as a concept, is somewhat archaic. Thus, par value is the nominal value of a security which is determined by the issuing company to be its minimum price.
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This was far more important in unregulated equity markets than in the regulated markets that exist today,[ when? The par value of stock remains unchanged in a bonus stock issue but it changes in a stock split.
In accounting, the par value allows the company to put a de minimis value for the stock on the company's financial statement. Par value is also used to calculate legal capital or share capital. Most jurisdictions make money from statistics not allow a company to issue stock below par value.
Even in jurisdictions that permit the issue of stock with no par value, the par value of a stock may affect its tax treatment.
For example, Delaware permits the issue of stock either with or without a par value, but by choosing to assign a par value, a corporation may significantly reduce its franchise tax liability. Instead of par value, some U.
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Also, par value still matters for a callable common stock : the call price is usually either par value or a small fixed percentage over par value. The shares in a corporation may be issued partly paidwhich renders the owner of those shares liability to the corporation for any calls on those shares up to the par value of the shares.
Currency[ edit ] The term "at par" is also used when two currencies are exchanged at equal value for instance, inTrinidad and Tobago switched from the British West Indies dollar to the new Trinidad and Tobago dollarand that switch was "at par", meaning that the Central Bank of Trinidad and Tobago replaced each old dollar with a new one.