The Difference Between Par Value and Market Price
A stock says 'par value 500 won,' but it actually trades at 80,000 won. These two are completely different. Let me clearly sort out par value and market price, which are often confused.
Par Value Is a 'Nominal Price Tag'
Par value is the nominal amount set when a stock is first issued and written on the securities documents. Korean stocks commonly have par values like 100 won, 500 won, or 5,000 won. This figure is merely an accounting basis for calculating the company's capital stock; you don't actually buy and sell at that price.
Put simply, par value is closer to 'a number printed on the stock's price tag.' It's a reference value from when the company was founded; it does not mean the stock's true value. So judging 'this stock is cheap/expensive' from par value alone is a completely wrong approach.
There are also stocks with no par value at all, like no-par-value shares. Just remember that par value is not 'value' but 'an accounting and issuance basis.'
Market Price Is 'What It Actually Trades At Right Now'
Market price is the price at which people actually buy and sell in the market at this very moment. It changes every moment according to the company's performance, growth expectations, market mood, and so on.
It's common for a stock with a par value of 500 won to trade at 80,000 won in the market. Conversely, some stocks trade below their par value. The two numbers are separate.
What an investor should actually care about is, naturally, the market price and whether that market price is appropriate relative to the company's value. Par value only appears in specific contexts, such as when a dividend rate is expressed on a par-value basis, or when discussing stock splits and reverse splits.
'Dividend rate relative to par value' and 'dividend yield relative to market price' are different numbers. When looking at dividends, you should look at the yield based on what you actually paid (market price) so there's no illusion.
常见问题
Q. Is a high par value a good stock?
It's completely unrelated. Par value is merely an accounting and issuance basis and has nothing to do with the company's value or whether the stock is good or bad. A stock with a par value of 100 won can be far more expensive and higher-quality than one with a par value of 5,000 won. Judgment should be made by market price and corporate value.
Q. Does a stock split change the par value?
Yes. For example, if you split a stock with a par value of 5,000 won by a factor of 10, the par value becomes 500 won, the number of shares increases tenfold, and the market price is also adjusted to roughly one-tenth. But this is just 'slicing it up'; the company's total value does not change.
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📋 结果基于历史数据计算,过去的收益不代表未来的收益。
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