Par value : It refers to the value of a stock that is stated by the corporation’s charter. It is also known as face value of a stock. Market value : It refers to the estimated price of a stock that a buyer is willing to pay and the seller is willing to accept in the stock market. To explain: the reason for the difference in the amount of par value and market value.

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Chapter 11, Problem 22Q

To determine

Par value: It refers to the value of a stock that is stated by the corporation’s charter. It is also known as face value of a stock.

Market value: It refers to the estimated price of a stock that a buyer is willing to pay and the seller is willing to accept in the stock market.

To explain: the reason for the difference in the amount of par value and market value.

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