Face value meaning

Face value is the stated value of a share on its certificate, representing its nominal price.

Face Value Example

For example, if a company issues 10M shares at a ₹10 face value, its authorized capital is ₹100M (10M × ₹10). The face value of ₹10 per share is fixed, unlike the market price.

How To Calculate the Face Value Of A Share?

To calculate the face value of a share, you need to know the company’s authorized share capital and total authorized shares. Then, divide capital by shares.

Face Value Vs Book Value

Face value is the original cost listed on the stock certificate, while book value is the net asset value of the company, calculated from its financial statements.

Face Value Vs Market Value

Face value is the original cost of a security listed on the certificate, while market value is its current trading price on the stock market.

Importance Of Face Value

Face value is crucial for calculating dividends, bond interest, and pricing. It also impacts corporate actions like stock splits, affecting share count and equity.

Want to learn the significance of face value in investing? Click here to explore its role in stock splits, dividends, and more.