Describe Some of the Lessons Economists Have Learned That Are

question 51

Essay

Describe some of the lessons economists have learned that are important to keep in mind when designing an incentive scheme.

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Definitions:

Stated Value

A value that is assigned to a share of stock by the issuing company, which may bear no relation to its market value.

Par Value

Par value is the nominal or face value of a bond, share of stock, or coupon as stated by the issuer.

No-Par Common Stock

Shares issued without a par value, meaning their value is determined by the market rather than a set face value.

Stated Value

The nominal value assigned by the company to its no-par stock, which becomes the legal capital per share.