Question

Why would a new corporation issue no-par stock with a stated value, rather than par-value stock?

Answer 1

No par value stock is shares that have been issued without a par value listed on the face of the stock certificate. Historically, par value used to be the price at which a company initially sold its shares. There is a theoretical liability by a company to its shareholders if the market price of its stock falls below the par value for the difference between the market price of the stock and the par value.

Companies set the par value as low as possible in order to avoid this theoretical liability