Common stock concepts

a. Par value – the maximum capital contribution required from investors for each share.

b. Book value – the accounting value for each share; total owners’ equity divided by the number of shares outstanding.

c. Market value – the price of each share in the financial marketplace reflecting investors forecasts of future cash flows the company will produce.

d. Liquidation value – the value investors would receive for each share if the company were dissolved and its assets sold.

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