what is par value 
par value also known as nominal or original value is the face value of a bond or the value of a stock certificate as stated in the corporate charter par value is required for a bond or a fixed income instrument and shows its maturity value and the dollar value of the coupon or interest payments due to the bondholder investopedia theresa chiechiunderstanding par valuepar value is the face value of a bond and determines a bond or fixed income instrument s maturity value as well as the dollar value of coupon payments the market price of a bond may be above or below par depending on factors such as the level of interest rates and its credit status the par value for a bond is often 1 000 or 100 the usual denominations in which they are issued 1a share of stock s par value is stated in the corporate charter shares usually have no par value or low par value such as one cent per share 2 once defined it is the lowest limit set to the value of a share of stock the par value however is commonly unrelated to a stock s market price the terms par value and face value are interchangeable and refer to the stated value of a financial instrument at the time it is issued the par value is the amount of money a bond issuer promises to repay bondholders at maturity bondholders essentially loan money to the bond issuer 3bonds can trade at a premium or a discount depending on the level of interest rates in the economy a bond with a face value of 1 000 trading at 1 020 is trading at a premium while another bond trading at 950 is considered a discount bond whether a bond is trading at a discount or premium the issuer always repays the par value to the investor at maturity a bond s coupon rate determines whether a bond will trade at par below par or above par value the coupon rate is the interest payment made to bondholders annually or semi annually as compensation for loaning the bond issuer money when market interest rates are lower bonds trade above par when market interest rates are higher bonds trade at a discount 45a stock s par value never fluctuates and is determined when shares are issued and formally stated on the stock certificate a bond s par value is the face value of the bond plus coupon payments annually or sem annually owed to the bondholders by the issuer of the debt a bond with a par value of 1 000 and a coupon rate of 4 will have annual interest payments of 4 x 1 000 40 if a 4 coupon bond is issued when market interest rates are 4 the bond is considered trading at par value since both market interest and coupon rates are equal if market interest rates rise to 5 the value of the bond drops and the bond will trade below par because the bond is paying a lower interest rate to its bondholders compared to the higher interest rate of 5 of other bonds in the market if market interest rates fall to 3 the value of the bond will rise and trade above par since the 4 coupon rate is more attractive than 3 while the par value of a corporate bond is usually stated as either 100 or 1 000 municipal bonds typically have par values of 5 000 6 treasury bills are sold at a discount to par in multiples of 100 7some states require that companies set a par value below which shares cannot be sold 8 to comply with state regulations most companies set a par value for their stocks to a minimal amount the par value for shares of apple aapl is 0 00001 and the par value for amazon amzn stock is 0 01 910shares cannot be sold below this value upon initial public offering to reassure investors that no one is receiving preferential price treatment some states allow the issuance of stock with no par value 11 an investor can identify no par stocks on stock certificates as they will have no par value printed on them 12 the par value of a company s stock can be found in the shareholders equity section of the balance sheet 13reasons companies set par valuethere are four main reasons why a company might set a par value this list mainly considers equities note that any given company may not experience the same requirements or considerations for having to set a par value par value vs market valuea financial instrument s par value is determined by the institution that issues it market value is the current price at which a bond or stock can be traded on the open market and constantly fluctuates as investors buy and sell bonds and shares of stock a bond can be purchased for more or less than its par value depending on interest rates and market sentiment because shares of stocks are commonly issued with a par value near zero the market value is often higher than the par value investors count on gains made by the changing value of a stock based on company performance and market sentiment 