definition Assumed bond par value:

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What Is Par Value?

Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its 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 the bond’s credit status.

ASSUMED BOND PAR VALUE

Par value for a bond is typically $1,000 or $100 because these are the usual denominations in which they are issued.

How Par Value Works

Par value for a share refers to the stock value stated in the corporate charter. Shares usually have no par value or very low par value, such as one cent per share. In the case of equity, the par value has very little relation to the shares' market price.

Par value is also known as nominal value or face value.

For example, a bond with a face value of $1,000 that is currently trading at $1,020 will be said to be trading at a premium, while another bond trading at $950 is considered a discount bond.

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