FOR BEGINNER. TRADING FACT#4
A financial term used to describe the nominal or monetary value of a security or share or bond.
is face value totally depend upon its issuer?
Ans: A company started its business and get able to be a publicly investable company. The company now spare some share for public holdings. and decided to keep the share price 10 rupees. this 10 rupees is the face value of this company. it is totally depends upon the issuer.
Is face value important judging any company for investing ?
No, face value is not. it is nothing but a share price at initial.
for stock, the face value is the initial price of share at the time company started being publicly investing company.
for bonds, it is the amount paid to the holder at the maturity of holding time. The face value of bonds is often called as ‘par value‘ or ‘par‘.
The actual market value of a stock or a bond is not indicated by its face value because there are many other influencing factor such as supply, demand etc.
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