Final answer:
Par value is the minimum legal capital per share that a company can issue its stock for, affecting the company's accounting and legal capital. It sets a baseline for the capital accounts in a company's ledger and can influence dividend calculations. However, its economic significance is minimal nowadays.
Step-by-step explanation:
In jurisdictions where par value shares are legally allowed, the only real significance of par value is that it represents the minimum legal capital per share that a company can issue its stock for. This par value is a nominal value assigned to a share of stock and is usually set at a very low amount. It can affect the accounting treatment of stock and is sometimes related to the legal capital that must be maintained by the corporation.
For corporations issuing stock, the par value is significant primarily because it dictates the minimum price that shares can be sold for upon initial issuance. The par value helps set the baseline for the company's capital accounts in its ledger and can play a role in the calculation of dividends. However, in modern business practices, par value often holds little economic significance and is set at a minimal amount to satisfy legal requirements without imposing practical constraints on share pricing.