What refers to the arbitrary amount assigned to a share in its certificate?

The correct term for the arbitrary amount assigned to a share in its certificate is par value. This concept refers to the nominal or face value of a share of stock, which is typically stated in the corporate charter and indicates the minimum price at which shares can initially be sold.

Par value serves several purposes in corporate finance. It establishes a baseline for the value of the stock and implies a level of capital that a corporation must maintain for the protection of creditors. Although shares may be sold at a market value that is different from the par value, the corporation is required to issue shares for at least this amount.

Additionally, par value can help clarify the distinction between different classes of stock a corporation may issue, as various stock classes can have differing par values. It is important to note that modern corporate practices often result in shares being issued with little or no par value, but the concept itself still remains relevant for understanding company valuation and its legal implications.

Other terms in the context of corporate finance, such as market value, liquidation value, and stated value, refer to different financial concepts. Market value pertains to the current price at which shares trade in the market, while liquidation value represents the estimated value of assets if a company were to be liquidated.