Par value

Definition

Par value in plain English

Par value is the official "sticker" number printed on a bond or share — for a bond it's usually the amount the borrower promises to repay you at the end, often $1,000. It's a fixed reference point set when the security is created, and it often differs from what the thing actually trades for day to day. Think of it like the face value stamped on a gift card: the card says $50, even if someone resells it for $45 or $55. For bonds it matters because interest payments are calculated off this par number, not the shifting market price.

Related Principles of Finance terms

• Accrued interest
• Allocation effect
• Basis
• Basis point
• Benchmark
• Bond-equivalent yield (BEY)
• Bootstrapping
• Callable bond
• Clean price
• Comparable company analysis (comps)