The arbitrary value assigned to a share of stock is calledGroup of answer choicespar valueliquidation valuebook valuemarket value
Question
The arbitrary value assigned to a share of stock is called
- Group of answer choices
- par value
- liquidation value
- book value
- market value
Solution
The value assigned to a share of stock that is determined by the company and is often used for accounting purposes is known as the par value.
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Par Value: It refers to the nominal or face value of a stock as specified in the corporate charter. This value does not reflect the actual market value and is mainly for legal and accounting purposes.
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Liquidation Value: This represents the net cash that would be received if the assets were sold and liabilities settled.
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Book Value: This is the value of an asset according to its balance sheet account, which may differ from market value.
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Market Value: It is the amount for which an asset would trade in a competitive auction setting, reflecting current market conditions.
Final Answer
The arbitrary value assigned to a share of stock is called par value.
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