par value: meaning, definition, pronunciation and examples
C2Formal / Technical
Quick answer
What does “par value” mean?
The nominal or face value of a security, bond, or share of stock as stated by the issuer, distinct from its market value.
Audio
Pronunciation
Definition
Meaning and Definition
The nominal or face value of a security, bond, or share of stock as stated by the issuer, distinct from its market value.
The value of a currency in relation to a standard (like gold) or another currency; the baseline value used in accounting for a financial instrument.
Dialectal Variation
British vs American Usage
Differences
No significant difference in meaning. 'Nominal value' is a slightly more common synonym in UK financial contexts.
Connotations
Neutral, technical term in both varieties.
Frequency
Equally common in specialised financial discourse in both regions.
Grammar
How to Use “par value” in a Sentence
The [security] has a par value of [amount].Shares were issued at/above/below par value.to set/establish the par valueVocabulary
Collocations
Examples
Examples of “par value” in a Sentence
verb
British English
- The bonds were par-valued at £1000.
American English
- The company par-valued its new shares at $0.01.
adjective
British English
- The par-value amount is listed on the share certificate.
American English
- Par-value accounting rules have changed.
Usage
Meaning in Context
Business
Crucial for accounting, bond issuance, and calculating dividends on preferred shares.
Academic
Used in economics and finance papers discussing security pricing, monetary systems, or corporate finance.
Everyday
Virtually never used in casual conversation.
Technical
A precise term in financial reporting, prospectuses, and regulatory filings.
Vocabulary
Synonyms of “par value”
Vocabulary
Antonyms of “par value”
Watch out
Common Mistakes When Using “par value”
- Using 'par value' to mean 'average value'.
- Confusing it with 'market value' in sentences (e.g., 'The par value of my house...').
FAQ
Frequently Asked Questions
No, par value is a fixed, nominal amount set by the issuer. Market price is determined by supply and demand and constantly fluctuates.
To minimise legal capital requirements and potential liability to shareholders, while allowing the shares to be sold at a much higher market price.
It is generally fixed, but a company can execute a 'stock split' or 'reverse split', which proportionally changes the number of shares and their par value.
No. Common stock often has a low par value, but some jurisdictions allow 'no-par-value' stock. Bonds and preferred shares almost always have a stated par value.
The nominal or face value of a security, bond, or share of stock as stated by the issuer, distinct from its market value.
Par value is usually formal / technical in register.
Par value: in British English it is pronounced /ˌpɑː ˈvæljuː/, and in American English it is pronounced /ˌpɑːr ˈvæljuː/. Tap the audio buttons above to hear it.
Phrases
Idioms & Phrases
- “at par”
- “above par”
- “below par”
- “on a par with”
Learning
Memory Aids
Mnemonic
Imagine a GOLF PAR score. It's the standard, expected score for a hole. 'Par value' is the standard, expected value set for a security, not its actual playing (market) value.
Conceptual Metaphor
VALUE IS A FIXED MARKER (like a peg or a stamp).
Practice
Quiz
If a £1000 bond is trading at £950 in the market, what is true?