Half Stock

Posted in Finance, Accounting and Economics Terms, Total Reads: 360
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Definition: Half Stock

Half Stocks are the stocks which are half the value of the standard face value sold in exchanges.


Half stock means that if the standard value of a stock is 10 Rs then half stock’s value will be Rs 5. The par value of the stock is not very important in the context of a common stock. Hence the value remains the same in case of a regular stock and half stock.


The half stock’s importance is realised on the preferred stock in which a constant dividend needs to be given on the par value of the stock.


Also preferred stock has a higher claim than common stock in case of liquidation of assets typically equivalent to its par value. This means that a half stock would receive less amount in the event of liquidation.

 

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