Face Value of Share
Friends, I wrote an article on this topic because many people do not know,What is Face Value of Share ? Face Value is par value of share.You have to see in share certificate face Value words.Its very important for the stock market.If any person start a company and invest money after some time, if he want expand his company business, he raise capital from primary market by IPO.At that time, he divides his investment into shares. He announces the price of the stock, which is called share premium.It is at this share price that investors buy shares of that company from the primary market.Any company keeps its share face value at Rs 10 because face value 10 rs makes it easy to evaluate dividend and split shares.Its help to company for calculation when company gives dividend and split shares.
Importance of face Value of Shares
Face value of shares important in terms of Dividend and Split shares because Face value is helps of calculation Dividend and Split shares.
Face Value of Shares and Dividend
If any company xyz company share price is 500 rs and face value is 10 rs.Its declared dividend 150 % its not mean company gives 150 % of share price its will give dividend on face value,its means 150 % of 10 rs is 15 rs dividend gives to shareholders.
Face Value of shares and Split Share
If any company xyz company share price is 500 rs and face value is 10 rs.Company want split shares in 1:5 ratio then company share price will be 100 rs and face value will be 2 rs.
Conclusion
So Face Value of shares is very important part in stock market for dividend and split shares.When the company is listed on the stock exchange, its face value is only 10 rupees. This 10 rupee mark is very thoughtful, it helps a lot in all valuations.
Hope you understand this article,What is Face Value of Share?,if there is any question related to this article, then you can ask and comment.
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