What is par value associated with?

Par value is specifically connected to the nominal value of a preferred share. It represents the face value of the stock that is stated in the corporate charter and is the amount that shareholders will receive if the company is liquidated. For preferred shares, this value often determines the minimum amount that shareholders will receive in terms of dividends, which are typically paid as a percentage of the par value.

In contrast, par value does not indicate the market value of shares, which can fluctuate widely based on supply, demand, and overall market conditions. Additionally, it does not correlate with the total profits of a corporation, as par value is a concept primarily focused on the individual equity instruments rather than the company's overall profitability. Similarly, it is not directly associated with expected returns on investment, as those depend on various financial factors, including performance, not just the nominal or par value assigned to shares.