Explain the differences between par value, book value, and market value per share of common stock.

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Explain the differences between par value, book value, and market value per share of common stock.

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For common stock, par value typically is a low figure of little significance. Book value is common stockholders’ equity divided by the number of common shares issued and outstanding. The market value of a common stock depends in general on the outlook for the firm and the economy (i.e. future earnings and dividends and their risk) and normally bears little relationship to book value and no relationship to par value

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