Question

The arbitrary amount assigned to each share of stock when it is originally authorized is its _______.

Answer 1

The arbitrary amount assigned to each share of stock when it is originally authorized is its par value.

Step-by-step explanation:

The arbitrary amount assigned to each share of stock when it is originally authorized is its par value. Par value is a nominal amount, typically set at a low value, such as $0.01 per share. It represents the minimum price at which the stock can be issued.

For example, if a company has authorized 10,000 shares of stock with a par value of $0.01, the total par value of the stock would be $100 ($0.01 x 10,000 shares).

Par value has little relevance in modern stock markets, and most stocks are issued with a par value of $0.01 per share or without a par value at all.