Question

"Alfonzo and Wendy were arguing about whether their company should issue par value common stock or no-par value common stock. Alfonzo said that par value stock was better because they could use it to help set the market price of the stock. Wendy disagreed. Who was right and why

Answer 1

Wendy was right because par value stock has not impact on the market price of the stock.

Step-by-step explanation:

Par Value:

The par value of stock is the value, that is generally a very small amount, which is stated on the stock certificates of a company. It has no connection with the market price of the stock.

• Some states ask the company to assign a par value for stock so that's why the companies minimum par value to the stock.
• If some companies don't assign par value to their stock then its means that their shares have no-par value.
• In our case, Wendy was right due to the fact that par values has no concern with the market price of the stock.