Question

Of two corporations organized at approximately the same time and engaged in competing businesses, one issued $150 par common stock and the other issued $1 par common stock. What is the difference between a stock’s par value and market value?

Answer 1

A stock Par value is also called as face value, and that is its literal meaning. The entity which issues a financial instrument assigns a par value to it. When shares of stocks and bonds were printed on paper, their par values were printed on the faces of the shares.

Market value, however, is the actual price which a financial instrument is worth at any given point of time for trade on the stock market. Market value constantly fluctuates with the ups and downs of the markets as investors buy and sell shares in the market.