Enter the total par value of shares and the total number of shares into the calculator to determine the par value per share.
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Par Value Per Share Formula
The following formula is used to calculate the par value per share for a given total par value and total number of shares.
P = T / N
Variables:
- P is the par value per share
- T is the total par value of shares
- N is the total number of shares
To calculate the par value per share, divide the total par value of shares by the total number of shares.
What is Par Value Per Share?
Par value per share is the nominal or face value assigned to a share of stock by the issuing company. It is a legal and accounting measure that represents the minimum price at which shares can be issued. The par value is typically set at a very low amount, such as $0.01 per share, and does not necessarily reflect the market value of the shares. Instead, it serves as a baseline value for accounting purposes and helps to establish the company’s legal capital.
How to Calculate Par Value Per Share?
The following steps outline how to calculate the Par Value Per Share.
- First, determine the total par value of shares (T).
- Next, determine the total number of shares (N).
- Finally, calculate the par value per share using the formula P = T / N.
- After inserting the values and calculating the result, check your answer with the calculator above.
Example Problem :
Use the following variables as an example problem to test your knowledge.
Total Par Value of Shares (T) = $10,000
Total Number of Shares (N) = 1,000