Full Stock Explained: 2025 Guide with Prices and Examples

What Is Full Stock?

Full stock refers to shares issued with a par value of $100 each. Typically, this term applies to preferred shares, as the par value for common shares today is often set at zero or a negligible amount. Hence, full stock mainly denotes preferred shares with a face value of $100 per share.

Key Insights

• Full stock shares carry a $100 face value.
• Usually associated with preferred shares, since common stock often has minimal or zero par value.
• Preferred and common stocks offer different advantages and disadvantages for investors and companies alike.

Understanding Full Stock in Detail

Preferred stock with a $100 par value shares similarities with bonds, notably having a fixed face value. The yield on such shares is calculated by dividing the annual dividend by $100. For instance, a $7.50 annual dividend equates to a 7.5% yield.

In bankruptcy situations, preferred shareholders receive payments before common shareholders. They also get dividends prior to common stockholders. However, preferred shares do not typically grant voting rights, unlike common stock. Additionally, their prices fluctuate similarly to bonds, meaning they don’t directly benefit from company growth.

Preferred shares can have various features influencing their valuation and trading behavior, including:

• Cumulative or noncumulative dividends
• Callable options
• Convertible features
• Participating rights
• Adjustable rates

Common stocks usually have a par value near zero for accounting and legal reasons. For example, Apple Inc. (AAPL) sets its common stock par value at $0.00001 per share. This minimal par value limits shareholder liability if the stock becomes worthless. Historically, full stockholders could claim the $100 par value in bankruptcy, but this is rare today.

Par value above zero forms part of a company's legal capital, known as paid-in capital. Any amount paid above par is recorded as additional paid-in capital. For example, if a stock with a $0.01 par value sells for $30, the company credits $0.01 to common stock and $29.99 to additional paid-in capital.

Full Stock Example: Impact of Interest Rate Changes in 2024

Consider Bank of America Corp. (BAC) issuing preferred shares with a $100 par value and a 6% dividend. Owning 100 shares yields $600 annually (100 shares x $100 x 6%). The initial investment totals $10,000.

Although the par value is fixed at $100, market prices fluctuate with interest rates. If comparable investments offer 5%, BAC’s 6% dividend is attractive, pushing the stock price above $100. Conversely, if market rates rise to 8%, the 6% dividend looks less appealing, and the preferred stock trades below $100.

Preferred stocks are perpetual; their prices inversely relate to interest rates. Rising rates typically lower prices, but dividends continue. Falling rates may increase prices or prompt companies to redeem shares and issue new preferred stock at lower rates.

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