Ajit asked in Business & FinanceInvesting · 1 decade ago

The difference between face value and par value in stock market?

When a company issues an amount of shares the starting price of each unit is par value. If I am right, what is face value. Then I want to compare share price with these value

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  • Rabbit
    Lv 7
    1 decade ago
    Favorite Answer

    The face value is the par value. After its issue the market determines value. Par values are primarily important when starting and funding the corporation. If I encorporated and declared a billion shares at $1, but only had a couple thousand dollars to start with, then the government usually has guidelines to declare such at least invalid and at worse to raise flags of fraud. You don't have to have all the capital you hoped to acquire when starting the company but the initial or at least initial expected value is reflected in the par value of the shares. That is why new companies often have par values in cents or fractions of a cent.

  • Anonymous
    1 decade ago

    face value is the value of the stock. par value is how much the stock is worth if the company goes under it is usually a few pennies.

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