A sign board in the supermarket will show “Mangoes for $2.50″ this actually refers to the price of 1 kg of mangoes in dollars and cents, this is not the price of the whole crate, which is on display.

Stock exchange prices are expressed in multiples of $0.01.

They always refer to the price for each share, unconditional of the par value of the share.

For instance, if a broker is going to state, “I purchased 3,000 IBM at 450″, it refers to that he purchased 3,000 shares of IBM at the rate of $4.50 per share.

In exact worth, the cost of the shares is $13,500.

In what way does the par value of a share influence its price?

If the voting rights applicable for a $5 PV share (Class B) were equal to that of a $1 share (Class A), then a Class B share will be valued at exactly five times the value of Class A share.

Due to the fact that the Class B shares are inferior (due to less votes), as known from the previous chapter, and because every $1 of par value provides the shareholder with just one vote, every basic share of Class B stock will be less worthy than one share of Class A stock.

For instance, at one point in time the cost of Class B $5 par value share would have been $1,360, while a basic share would have been of a $272 in cost.

Investors, who are lot more interested in a profit of the company than its voting rights, will prefer to buy the Class B shares, since all of the basic shares are cheaper, apart from the voting rights, this share entitles the share holder to the have the same share from the company’s profits.