# Is par value paid at maturity?

## Is par value paid at maturity?

The par value (face value) of a security will never change. For instance, a bond issued at par of \$1,000 will always pay that amount upon its maturity.

When a bond is selling at par value?

A bond that was trading at par would be quoted at 100, meaning that it traded at 100% of its par value. A quote of 99 would mean that it is trading at 99% of its face value. Par value for common stock exists in an anachronistic form. In its charter, the company promises not to sell its stock at lower than par value.

What is the par value of the bond?

Definition: The par value of a bond also called the face amount or face value is the value written on the front of the bond. This is the amount of money that bond issuers promise to be repaid bondholders at a future date. For instance, a company might issue \$500, 15-year bonds to the public.

### Is the par value of the bond is its required rate of return?

(a) The value of bond is greater than its par value, when required rate of return is greater than the coupon rate. (b) The value of the bond is equal to its par value when required rate of return is equal to the coupon rate.

What is the relationship between par value and maturity?

A bond’s par value is the dollar amount it will be worth when it reaches maturity. Before its maturity date, the bond may sell for more or less than par value on the secondary market as the yield it pays becomes more or less attractive to buyers.

What does it mean for a bond to trade at par?

A par bond is a bond that sells at its exact face value. This typically means that a bond sells for \$1,000, since this is the face value of most bonds. A par bond will have a yield to the investor that matches the coupon amount attached to the bond.

#### How do you know if a bond is selling above or below par value?

At maturity, the bondholder receives the par value of the bond, which is a higher value than what the bond was purchased for by the investor. If a bond, for example, has a \$1,000 face value printed on its certificate but is selling in the market for \$920, it is said to be trading below par.

Does the par value of a bond change?

Does the Par Value Change? It’s important to note that the par value of a bond—the amount you will receive at maturity—will never change regardless of the market rate or bond price.

How is par value determined?

A par value for a stock is its per-share value assigned by the company that issues it and is often set at a very low amount such as one cent. A no-par stock is issued without any designated minimum value. Neither form has any relevance for the stock’s actual value in the markets.

## Does par value of bond change?

What is the purpose of par value?

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.