Par (redirected from par of exchange)

In Commercial Law, equal; equality.

The term par refers to an equality that exists between the nominal or face value of a document—such as a bill of exchange or a share of stock—and its actual selling value. When the values are equal, the share is said to be at par; if it can be sold for more than its face value, it is above par; if it is sold for less than its nominal value, it is below par.

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par n. 1) equal. 2) the face value of a stock or bond, printed on the certificate, which is the amount the original purchaser paid the issuing corporation. However, most common stocks are issued as "no-par value," and the value reflects the current market for the stock. Preferred stocks state a par value upon which the dividends are calculated, and the par value of bonds establishes the final pay-off amount upon maturity, usually many years in the future. (See: stock, common stock, preferred stock)

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PAR, comm. law. Equal. It is used to denote a state of equality or equal value. Bills of exchange, stocks, and the like, are at par when they sell for their nominal value; above par, or below par, when they sell for more or less.