What is a 'Stated Value'

A stated value is an amount assigned to a corporation's stock for internal accounting purposes when the stock has no par value. Like par value, stated value is nominal, typically between $0.01 and $1.00. Stated value has no relation to market price.

BREAKING DOWN 'Stated Value'

A company can choose to issue no par value stock, but for its own records it must assign a stated value to satisfy the minimum requirement for legal capital in the state where it incorporates. As an example, if stated value is $0.01 per share and the company issues 1 million shares, the stated value of its stock is $10,000.This amount is credited to the company's capital stock account, and is considered the legal capital of a corporation. Because it is generally illegal for a company to pay dividends or repurchase shares if doing so impairs the legal capital, stated value helps to provide shareholders with some protection. However, in practice, with stated value per share as low as one penny, monetary interest is modest or de minimus.

No Par Value Example

Apple Inc.'s balance sheet for its fiscal year 2013 showed an authorization of 1.8 billion no par value shares and 899 million shares issued and outstanding. The common stock in the shareholders' equity account was worth $19.8 billion as of the end of the fiscal year. There is no note in the Form 10-K that breaks down the account into stated value and additional paid-in capital amounts, but it can be assumed that almost all of the $19.8 billion represents additional paid-in capital.

RELATED TERMS
  1. Capital Stock

    Capital stock is the number of common and preferred shares that ...
  2. Par Value

    Par value is the face value of a bond, or for a share, the stock ...
  3. Contributed Capital

    Contributed capital, also known as paid-in capital, is the total ...
  4. Additional Paid In Capital

    Additional paid in capital is a value that is often included ...
  5. Capital

    Capital is a term for financial assets or their financial value, ...
  6. Share Premium Account

    A share premium account appears on the balance sheet, and is ...
Related Articles
  1. Investing

    Microsoft Stock: Capital Structure Analysis (MSFT)

    Analyze Microsoft's capital structure to determine the roles of debt and equity in its financing, and explore what these trends say about the cost of capital.
  2. 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.
  3. Investing

    Mark-To-Market: Tool Or Trouble?

    Mark-to-market accounting can be a valuable practice, but all bets are off when the market fluctuates wildly.
  4. Investing

    Does Active Value Investing Pay Off?

    Learn about a well-researched paper that explores why active value investors underperform, and how value investing might be beneficial for your portfolio.
  5. Investing

    Investment Value Vs. Fair Market Value: How They Differ

    Learn about the differences between an asset's investment value and its fair market value, including why many think fair market value is unrealistic.
  6. Investing

    Cheap Stocks or Value Traps?

    The value of stocks that trade at less than cash per share can be deceiving.
  7. Investing

    Value or Growth Stocks: Which Are Better?

    The answer to the age-old debate about growth versus value stocks depends on a number of factors.
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. 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 >>
  3. 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 >>
  4. Why can additional paid in capital never have a negative balance?

    Find out why the additional paid-in capital entry on a company's balance sheet can never be negative and how paid-in capital ... Read Answer >>
  5. How does a share premium account appear on a balance sheet?

    Learn where a share premium account shows up on a balance sheet and for what purposes funds in a share premium account may ... Read Answer >>
  6. How Are Book Value and Market Value Different?

    Book value and market value are two financial metrics used to determine the valuation of a company and whether the stock ... Read Answer >>
Trading Center