The par value of preferred stock is the nominal or face value assigned to the stock by the issuing company, typically stated on the stock certificate. This value is generally set at the time of issuance and remains fixed. The par value of preferred stock is important for several reasons:

1. Dividend Calculation: Preferred stock dividends are often expressed as a percentage of the par value. For example, a 5% dividend on a preferred stock with a $100 par value would yield a $5 annual dividend per share.

2. Redemption Value: In cases where the preferred stock is callable or redeemable, the par value may represent the amount the company will pay to repurchase the stock from shareholders.

3. Liquidation Preference: During the liquidation of a company, preferred shareholders are typically entitled to receive their par value before any distributions are made to common shareholders. This provides a level of security to preferred stockholders.

4. Balance Sheet Impact: The par value of preferred stock is recorded in the equity section of a company’s balance sheet, contributing to the company's stated capital.

While the par value of preferred stock doesn't usually reflect its market value, it plays a crucial role in financial calculations and investor considerations. It is a foundational element in understanding the financial rights and priorities associated with preferred stock ownership.