What is face value?

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Face value is an arbitrary value of the securities determined by the issuer to analyse the growth and needs in real numbers on the balance sheets. For example, if the company has a requirement of Rs 20 lakh, it can decide the face value of the stocks at Rs 10 and issue 2 lakh shares to raise funds. With the company's growth and investor sentiments, the value of stocks increases or decrease significantly.

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3 Comments

kamlesh manchekar
3. kamlesh manchekar  Aug 28, 2009 13:51 I Like It. | Report Abuse Reply 0
That is the amount the issuer has borrowed, usually the amount you pay to buy the bond at the time it is issued, and the amount you are repaid at maturity, provided the issuer doesn't default.

However, bonds may trade at a discount, which is less than face value, or at a premium, which is more than face value, in the secondary market. That's the bond's market value, and it changes regularly, based on supply and demand.

The death benefit of a life insurance policy which is the amount the beneficiary receives when the insured person dies. It's also known as the policy's face value
sharu
2. sharu  Dec 29, 2007 12:32 I Like It. | Report Abuse Reply 0
face value is the intrensic valu of share
ashish srivastava
1. ashish srivastava  Dec 18, 2007 12:43 I Like It. | Report Abuse Reply 0
face value means value at which the share is issued excluding premium value.








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