par value

noun

Definition of par value 

Examples of par value in a Sentence

Recent Examples on the Web

Consider what’s going on with MBIA the parent of bond insurer National, which insures about $4 billion in par value of Puerto Rico bonds. Amey Stone, WSJ, "Puerto Rico’s Troubles Create New Opportunities for Investors," 17 July 2017 In 2016, an average of $201.7 million in par value worth of bonds was traded daily on BondPoint, up more than 40% from the year before, according to regulatory filings. Alexander Osipovich, WSJ, "Owner of NYSE Agrees to Buy Bond-Trading Platform," 24 Oct. 2017

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'par value.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

First Known Use of par value

1797, in the meaning defined above

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Parus

parv-

parva

par value

parvanimity

parve

parvenu

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The first known use of par value was in 1797

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More Definitions for par value

par value

noun

Financial Definition of par value

What It Is

Par value is the face value of a bond. It is the principal amount that the lender (investor) is lending to the borrower (issuer).

How It Works

Let's assume Company XYZ issues $1,000,000 in bonds to the public. It may do so by issuing 1,000 bonds, each with a $1,000 par value.

When each bond matures, the borrower will pay back the par value of $1,000 to the lender.

Most corporate bonds have $1,000 face values, but municipal bonds often have $5,000 par values and federal bonds often have $10,000 par values.

Stock is also assigned a par value, though it is generally a very small, arbitrary value (usually $0.01) assigned to each share. Preferred stock may be assigned a higher par value because it is often used to calculate dividends.

Why It Matters

For bonds, par value is a pricing benchmark. When the bond's price is below the par value, the bond is selling "at a discount"; when the bond's price is above par value, the bond is selling "at a premium."

The difference between a bond's price and a bond's par value cannot be overemphasized. In fact, it's one of our 3 Most Deadly Misconceptions About Bonds.

Par value has little significance for equities because it generally does not influence the stock price itself.  The cumulative par value of all the company's shares outstanding is reflected in the shareholders' equity section of the balance sheet.

Source: Investing Answers

par value

noun

Legal Definition of par value 

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