stated value

Stated Value

A value that, instead of being par value, is assigned to a corporation's stock for accounting purposes. Stated value has no relation to market price.

Notes:

For example, if stated value is $1 per share and the company issues 1 million shares, the stated value of its stock is $1 million. This amount is credited to the company's capital stock account, and is considered the legal capital of a corporation. Because it is generally illegal for a company to pay dividends or repurchase shares if doing so impairs the legal capital, stated value does help to provide shareholders with some protection.

Par value stock has a stated value on its face representing the minimum amount contributed by the shareholder. Stock without a par value has no stated value, allowing the corporation to issue it for any amount per share that the board of directors determines to be appropriate.

See also: Board of Directors, Dividend, Market Price, Market Value, Par Value, Share Repurchase

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Stated value

A monetary worth figure that bears no relation to market value that is assigned, for accounting purposes, to stock for use instead of par value.

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stated value

A value assigned to common stock by the firm's management for purposes of financial statements. Stated value, used in place of par value, is calculated on a per-share basis by dividing the stated capital resulting from a new issue of common stock by the number of new shares issued. Stated value is unrelated to the stock's market price and is of little importance to the shareholders.