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Half Stock

Source: Investopedia
This Article has been Edited for Accessibility

Half Stock

What is 'Half Stock'

Stock sold with a par value half of what is considered standard. Half stock can be either common or preferred and, other than the reduced par value, acts as a regular share of stock. The par value of a typical share of stock is $100, meaning that half stock has a par value of $50.

Explaining 'Half Stock'

The valuation of a share of common stock is typically the same for both a regular share of stock and half stock, since much of the stock's value is related to growth potential. Par value is an important factor in determining the dividend of a share of stock, making it more important for preferred stock. Additionally, preferred stock may have a higher claim on the proceeds of a company being liquidated, typically equivalent to its par value. This means that a half stock share of preferred stock would potentially receive less in liquidation.


Additional Resources

  1. Stocks And The Economy [brookings.edu]
  2. Down And Out In The Stock Market: The Law And Economics Of The ... [digitalcommons.law.yale.edu]
  3. What Stock Market Returns To Expect For The Future? [economics.mit.edu]
  4. Problem 1: [pitt.edu]
  5. Presidential Elections And Stock Market Cycles [gbr.pepperdine.edu]
  6. The Four-year U.s. Presidential Cycle And The Stock Market ... [gbr.pepperdine.edu]