Face value

The face value of a security is the amount that is shown on certificates (if issued) or on legal documents.

The face value of a share is also called its par value and it has little importance. For ordinary shares it represents little more than an arbitrary value chosen the company.

The face value of a bond is more important because it is the amount payable on maturity: the face value of bonds has an effect on their value that the face value of shares does not.

Copyright Graeme Pietersz © 2005-2020