Face Value

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Face Value

Meaning:

Face value, also known as par value, is defined as the original value of a share or bond set by the issuing company at the time of its release. It is printed on share certificates and remains constant unless the company decides to split or consolidate its shares.

Example:

For example, if a company issues shares with a face value of ₹10, this amount is used as the basis for various corporate decisions and accounting practices.

How to understand Face Value:

Face value serves as the base for calculating dividends paid to shareholders (e.g., a 100% dividend on a face value of ₹10 results in a ₹10 payout).

It is essential for understanding the share capital of a company, calculated as face value multiplied by the number of shares.

Uses of Face Value:

It is used to compute interest on bonds, where the coupon rate is applied to the face value.
It helps compare stock splits, where a company may reduce the face value to increase the number of shares available.

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Disclaimer

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Face Value

It is used to compute interest on bonds, where the coupon rate is applied to the face value. It helps compare stock splits, where a company may reduce the face value to increase the number of shares available.

It is used to compute interest on bonds, where the coupon rate is applied to the face value.
It helps compare stock splits, where a company may reduce the face value to increase the number of shares available.