Face value
Also called: par value
The nominal value printed on a share when it is created, such as ₹1 or ₹10, used in accounting and unrelated to its market price.
Face value is set when a company creates its shares and is used in its accounts to record share capital. It has little to do with what a share is worth.
Dividends are sometimes announced as a percentage of face value, which can mislead: a "200% dividend" on a ₹1 face value share is ₹2 per share, however high the market price is.
Example
A share with a face value of ₹2 might trade at ₹1,500. A "100% dividend" on it would be ₹2 per share, a yield of about 0.13% at that price.
Learn more in these lessons
- What is a share?What does owning a share actually mean?
- Dividends, splits, bonus shares and other corporate actionsWhat happens to my shares in a split, bonus issue or rights issue?
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