What does par value refer to?

Par value refers to the value printed on the stock certificate and represents the nominal or face value of a share of stock as designated by the company at the time of issuance. It serves as a baseline value indicating what a shareholder will receive in terms of shares, though it does not necessarily reflect the actual market value of the stock at any given time.

This concept is significant in corporate finance as it can affect the accounting treatment of stocks and is used primarily for legal purposes. In many cases, especially with common stock, par value may be set very low or even at a nominal amount, and it often becomes irrelevant in the context of market trading where the price of shares can fluctuate based on supply and demand.

The other options do not accurately describe par value. The market price of a company’s shares fluctuates based on market demand and other factors, and the liquidation value refers to the total worth of a company's physical assets in the event of liquidation. Estimated future earnings deal with projected profits and do not have a direct connection to the concept of par value.