How to Calculate Par Value of Stock
Par value is the face value of a security or debit instrument. In bonds, the par value represents the face value, or price at issue of the bond. For stocks, the answer depends on the kind of stock it is and the company that issued the stock.
Instructions
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Look up a quote using the symbol of the stock you are interested in to determine if you are looking at preferred or common stock. The main three- or four-letter stock symbol for any company applies to its common stock, while the preferred stock has a symbol with additional letters. For example, the common stock symbol for Kimco Reality is KIM, while its preferred stock symbol is KIMPRF. Many quoting systems also display the full name of the security in question, so look for the words "Preferred" in the name of the equity.
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Look in the company's annual report to find the par value of common stock. You can find this in the section where the company spells out the details about amounts and types of stock currently active. All common stock shares have the same par value regardless of the date they were purchased. The company sets the par value at the issuance of the stock, usually at a nominal value. If yours is common stock, skip the remaining steps. For preferred stock, continue with the steps below.
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For preferred stock, you can find the par value in two ways. The first is to look at the company's balance sheet, which lists the preferred stock as shareholder equity. This may be easier because balance sheets are released quarterly.
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The second way is to look at either the stock's issuing documents or prospectus, which lists the number of shares issued, the dividend rate and the par value. These documents may be older and thus slightly more difficult to find.
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Tips & Warnings
Par value is mostly irrelevant for common stock; legally, however, companies are required to assign one in some jurisdictions, so most companies simply set a very low number. IBM stock, for example, has a par value of $0.20. Many companies set their common stock's par value at $0.01.
