Which type of stock is defined as having par value?

Par-value stock is defined as having a par value, which is a nominal value assigned to each share of stock and represents the minimum legal capital that must be maintained by the company. This value is typically stated in the corporation's charter and is used primarily as an accounting measure rather than reflecting the market value or sale price of the shares.

When a company issues par-value stock, it indicates the minimum amount that shareholders must pay for each share. This has implications for the capital that a company must maintain, ensuring that a certain level of capitalization is established as part of its financial structure. On balance sheets, the par value of the shares helps to delineate between the capital contributed by investors and any additional paid-in capital that may exceed par value.

Other types of stock, such as no-par-value stock, do not have this assigned value, meaning no minimum legal capital requirement exists in terms of share value. Preferences between common and preferred stock also focus on rights to dividends and assets upon liquidation, rather than par value. Thus, par-value stock is specifically identifiable as having an assigned par value, which is essential in the realm of corporate finance and legal capital considerations.