What is face value?

Face value is an arbitrary value of the securities determined by the issuer to analyze the growth and needs in real numbers on the balance sheets. For example, if the company has a requirement of Rs 20 lakh, it can decide the face value of the stocks at Rs 10 and issue 2 lakh shares to raise funds. With the company’s growth and investor sentiments, the value of stocks increases or decreases significantly.

 

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