33 The par value of a stock A is used to determine minimum l

33. The par value of a stock: A) is used to determine minimum legal capital balances at issuance. B) is the excess monies received after the stock is issued. C) is selected by the SEC. D) is the closing price of the stock on the day of issuance

Solution

The Correct option is (A)

The par value of stock represents the minimum amount that must be paid per share. Par value is also referred as the Face Value or Nominal Value of common stock.

The Par Value of common stock is

Par Value of Common Stock = (Par value per share) x (Number of Issued Shares)