The Par Value of Common Stock Represents the

question 199

Multiple Choice

The par value of common stock represents the

• A)liquidation value of the stock.
• B)book value of the stock.
• C)legal nominal value assigned to the stock.
• D)amount received by the corporation when the stock was originally issued.
• E)None of these choices is correct.

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Definitions:

Voting Common Stock

Shares that give the holder the right to vote on corporate policy and make decisions affecting the company's governance.

Net Income

The ultimate financial benefit a company receives after revenue has been adjusted for expenses and taxes.

Bond Investment

Purchasing of bonds as a way to generate income through interest payments, with potential for capital gains.

Book Value

The value of an asset as it appears on a balance sheet, calculated by subtracting any depreciation or amortization from the asset's original cost.