Definition: Face value is also known as nominal value or PAR value. Face value is the value written above the stock/share or currency. As we all know Share means owning some percentage of a particular company through investing some amount in it. Every stock has a particular price which does not change regularly and it is almost fixed, this fixed price is known as Face Value.
Difference between Share Value and Market Value:
Face Value and Market values are two different things. The market value of a share is dependent on the demand of the share. But, the face value of a share is that legal or initial value on the basis of which the total shares of the company are issued in the market.
There is no relationship between Market value and the face value of the share. For deciding the earning of profits the face value of the bond is effective. Therefore the face value does not have any role in the market value. The market value changes because of the fluctuation in the market situation. But the face value is fixed, it does not change and remains same as specified in the certificate or company books. As the market value keep changes, therefore for trading in stock the investors or traders need Free Stock Trading tips to analyze market value.
Face value can be also known as the actual value of the stock i.e. number written on the rupee shows its value like 50 or 100 rupees, the face value also shows the actual value of the stock. The face value is also written on the Physical Form of the shares of the company.
Use of Face Value:
Face value is very important to understand for an investor or a beginner trader. The face value is important in uses of this following:
- For Payment of Dividend: When a company declares its dividend then it is totally dependent on the face value.
- For Stock Split: Face value is the main base of the stock split
- To give Share Bonus: Share bonus of the company is announced on the basis of share bonus
- To calculate the Company’s Growth
How to check Face Value of Stock:
The face value of any stock gets to known by the financial value of the company. The companies listed in the stock market keep their financial statement in the public domain. You can check the face value of any stock at the equity section on the website of national stock exchange NSE or Bombay stock exchange BSE.