The Par Value of Common Stock Must Always Be Equal

question 163

True/False

The par value of common stock must always be equal to its market value on the date the stock is issued.

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Definitions:

Present Value

The immediate value of a future amount of money or a series of payments, discounted at a given rate of return.

Compound Interest

Interest calculated on the initial principal and also on the accumulated interest of previous periods.

Required Rate

The minimum acceptable return on an investment or project, often used in capital budgeting.

Annuity

A fiscal instrument that provides a consistent flow of income to a person, often employed as a revenue source for those in retirement.