DEFINITION of 'Half Stock'

Stock sold with a par value half of what is considered standard. Half stock can be either common or preferred and, other than the reduced par value, acts as a regular share of stock. The par value of a typical share of stock is $100, meaning that half stock has a par value of $50.

BREAKING DOWN 'Half Stock'

The valuation of a share of common stock is typically the same for both a regular share of stock and half stock, since much of the stock's value is related to growth potential. Par value is an important factor in determining the dividend of a share of stock, making it more important for preferred stock. Additionally, preferred stock may have a higher claim on the proceeds of a company being liquidated, typically equivalent to its par value. This means that a half stock share of preferred stock would potentially receive less in liquidation.

RELATED TERMS
  1. Par Value

    Par value is the face value of a bond, or for a share, the stock ...
  2. At Par

    At par is a term that refers to a bond, preferred stock or other ...
  3. Pull To Par

    Pull to par is the movement of a bond's price toward its face ...
  4. Purchase Fund

    A feature of some bond indentures and preferred stock that requires ...
  5. Additional Paid In Capital

    Additional paid in capital is a value that is often included ...
  6. Above Par

    Above par is a term used to describe the price of a bond when ...
Related Articles
  1. Investing

    What is a Share Premium Account?

    The share premium account is an equity account found on a company’s balance sheet.
  2. Investing

    Investing in Preferred Stock:The Basics

    Preferred stocks provide income as well as the potential to appreciate in value.
  3. Investing

    What You Should Know About Preferred Stocks and Interest Rates

    These are the pros and cons of preferred stocks in a rising interest rate environment.
  4. Investing

    Valuation Of A Preferred Stock

    Determining the value of a preferred stock is important for your portfolio. Learn how it's done.
  5. Investing

    Market value versus book value

    Understanding book value and market value is helpful in determining a stock's valuation and how the market views a company's growth prospects.
  6. Financial Advisor

    Analyzing Owners' Equity

    Analyzing owners’ equity is an important exercise for any shareholder.
  7. Investing

    What Is The Value In Value Investing?

    Value investing has its advantages, but it also has significant drawbacks. We look at the pros and cons.
  8. Investing

    How Value Investors’ Patience Has Been Tested

    Investors in value stocks are finding their patience tested. Does this strategy still work?
  9. Investing

    Balance Sheet: Analyzing Owners' Equity

    Analyzing owners’ equity is an important analytics tool, but it should be done in the context of other tools such as analyzing the assets and liabilities on the balance sheet.
RELATED FAQS
  1. Par Value Stock vs No Par Value Stock

    Understand the difference between par and no par value stock and how this differentiation affects corporate liabilities and ... Read Answer >>
  2. Why would a stock have no par value?

    Corporations sometimes issue shares with no par value because it helps them avoid a liability should the stock price take ... Read Answer >>
  3. Par value vs market value

    Learn about the difference between the par value and market value of financial securities, including the role they play in ... Read Answer >>
  4. What are some examples of preferred stock, and why do companies issue it?

    Understand the difference between preferred stock and common stock, and learn the primary reasons why companies issue preferred ... Read Answer >>
  5. What is the difference between preferred stock and common stock?

    Preferred stockholders have a greater claim to a company's assets and earnings than common stockholders, but may not have ... Read Answer >>
Trading Center