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What is Face Value/ Par Value

Value of security as mentioned on certificate of the security. Face values and par values are two terms that are used interchangeably. Corporate debentures are generally issued with 100$ face values and Government bonds with 1 million $ face values. Although the value of debenture (or Government bond) will fluctuate in price from the time they are issued until redemption, they are generally redeemed at maturity at their face value (except a premium is to be given on redemption).

Face value is the amount on which interest is calculated. So a 15 per cent debenture with a face value of 100$ will pay debenture holders 15$ per debenture per year.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M9581195

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