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Article

Why the Par Value of Share Matters to Investors

Faculty of Computer Science and Management, Wrocław University of Science and Technology, 50-370 Wrocław, Poland
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Int. J. Financial Stud. 2021, 9(1), 16; https://0-doi-org.brum.beds.ac.uk/10.3390/ijfs9010016
Received: 24 January 2021 / Revised: 9 March 2021 / Accepted: 12 March 2021 / Published: 16 March 2021
The purpose of the study is the analysis of the relationship between the par value (also known as nominal value or face value) and the parameters influencing a company’s financing. Additionally, the utility of the par value as a manipulation tool for equity offerings is examined. The study is based on a sample of IPO firms which went public on the Warsaw Stock Exchange. The study finds that an excess supply of shares has a negative impact on their valuation. In contrast, decreasing the par value prompts perceptual biases among investors beneficial to the success of the issuance. Moreover, share capital is found to be a useful signaling tool to improve the company’s position on the financial market. View Full-Text
Keywords: par value; financing; share premium; share capital; signaling; face value; nominal value; share price psychology; IPO; WSE par value; financing; share premium; share capital; signaling; face value; nominal value; share price psychology; IPO; WSE
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MDPI and ACS Style

Dudycz, T.; Brycz, B. Why the Par Value of Share Matters to Investors. Int. J. Financial Stud. 2021, 9, 16. https://0-doi-org.brum.beds.ac.uk/10.3390/ijfs9010016

AMA Style

Dudycz T, Brycz B. Why the Par Value of Share Matters to Investors. International Journal of Financial Studies. 2021; 9(1):16. https://0-doi-org.brum.beds.ac.uk/10.3390/ijfs9010016

Chicago/Turabian Style

Dudycz, Tadeusz, and Bogumiła Brycz. 2021. "Why the Par Value of Share Matters to Investors" International Journal of Financial Studies 9, no. 1: 16. https://0-doi-org.brum.beds.ac.uk/10.3390/ijfs9010016

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