face value
DefinitionThe nominal dollar amount assigned to a security by the issuer. For an equity security, face value is usually a very small amount that bears no relationship to its market price, except for preferred stock, in which case face value is used to calculate dividend payments. For a debt security, face value is the amount repaid to the investor when the bond matures (usually, corporate bonds have a face value of $1000, municipal bonds $5000, and federal bonds $10,000). In the secondary market, a bond's price fluctuates with interest rates. If interest rates are higher than the coupon rate on a bond, the bond will be sold below face value (at a "discount"). If interest rates have fallen, the price will be sold above face value. here also called par or par value.
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face value is ...
... part of the Bonds, Futures, Mutual Funds, Options, Stocks and Investor Relations subjects.
... part of the Bonds, Futures, Mutual Funds, Options, Stocks and Investor Relations subjects.
Related Terms
bank discount, below par, coupon yield, current market value, deep-discount bond, discount bond, discounted bond, duration, face-amount certificate, level term insurance and
face value appears in the definitions of these other terms on BusinessDictionary.com
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