Stock!!!!!!!!?

May 12, 2012 under Hong Kong Stock

- Chosen by Voters Par Value is the selling price orignally asked when a stock is first issued. Assuming that the stock is "worth" the par valueat the time it is issued then the answer is B but par value for a stock doesn't always reflect the worth of a stock. Stocks are bought and sold most of the time at over par although they can be bought under par sometimes. Par Value doesn't change but the worth does. If a company issues 1,000,000 shares of stock at par of $5 they generate $5,000,000 of capital to use for their company. If in the next 5 years the company is growing and investors think the company will continue to grow and pay good dividends they may be willing to pay $10 per share for the stock. The company does not get this money and the Par Value doesn't change. Some of the investors who bought the original shares at $5 may be willing to sell them for $10. They are the ones who make the gain. Source(s): Investor ofr over 30 years 4 years ago 67% 2 Votes

comments: 0 » tags: