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ACCTFINAL - Par Value Par Value represented the Maximum...

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Par Value – Par Value represented the Maximum liability of the investors. Legal Capital – Par value multiplied by the number of shares of stock issued represents the minimum amount of assets that must be retained in the company as protection for creditors. This amount is known as legal capital. Stated Value – an arbitrary amount assigned by the board of directors to the stock. It has little relevance to investors and creditors. used on No-par stock. Market Value – The price an investor must pay to purchase a share of stock. Book Value per share – is calculated by dividing total stockholders’ equity ( assets – liabilities ) by the number of shares of stock owned by investors. Book balue per share differs from market value per share because equity is measured in historical dollars and market value reflects investors’ estimates of a company’s current value. Authorized Stock – The maximum number of shares of stock corporations are legally permitted to issue.
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