What is face value of a bond with example

Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the holder at maturity, typically in $1,000 denominations.

How do you calculate face value of a bond?

The bond valuation formula is presented here: Price=(Coupon൱−(1+r)−nr)+Par Value(1+r)n Price = ( Coupon × 1 − ( 1 + r ) − n r ) + Par Value ( 1 + r ) n , where: Coupon is the cash flow received for each intermediate payment before the par value.

What is face value of a share with example?

The face value is the nominal value of the shares, that is, their original cost, as mentioned in the share certificate. It is just an accounting value that could either be ₹1, ₹2, ₹5, ₹10, or even ₹100. The concept of face value can be easily understood with an example of an initial public offering (IPO).

Is face value always 1000?

Key Takeaways\n\n Par value, also known as nominal value, is the face value of a bond or the stock value stated in the corporate charter. Par value for a bond is usually $1,000 (or to a lesser degree $100), as these are the most common denominations in which they are issued.

What face value means?

This value indicates the price at which you can buy the stocks of any company. Face or nominal value is set up when the company or the firm starts issuing its bonds and shares. In the case of stocks, this value is equal to the original value of the stock as present on the certificate.