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What is no-par stock?

No-par stock

The term refers to shares of common stock that are issued with no-par (or face) value. This was once important, but nowadays it's very common for companies to issue capital stock with no-par value because the prices of stocks vary constantly.

Where have you heard about no-par stock?

These days, most shares are issued either with no face value or a very low par value such as $0.01 per share, so the term and practice are both widely known in the 21st century stock market.

What you need to know about no-par stock.

No-par stock prices are determined by what investors are prepared to pay for them in the market. Companies that issue no-par stock have flexibility in setting higher prices for public offerings, and have less liability to shareholders if their stock plunges dramatically.

As it's well known that stock markets and individual stock prices go up and down, investors don't usually view a par or face value as being necessary before they purchase a particular investment. So a no-par stock's sale price is determined by the principles of supply and demand, without being misrepresented by an artificially fixed face value.

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