What is face value and par value, Financial Management

Assignment Help:

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.

 


Related Discussions:- What is face value and par value

How do tax considerations affect the cost of debt, How do tax consideration...

How do tax considerations affect the cost of debt and the cost of equity? For the reason that interest on debt is tax deductible to the issuing firm, the higher the tax rate th

Coupon curve duration, Market price is used for determining the dura...

Market price is used for determining the duration of a mortgage-backed security in the coupon curve duration. This approach to calculate the duration of mortgage-bac

Define risk adjusted discount rate enhance capital budgeting, Explain how u...

Explain how using a risk-adjusted discount rate enhances capital budgeting decision making compared to by using a single discount rate for all projects? The risk-adjusted disco

Illustrate modern method of measurements, Q. Illustrate Modern Method of Me...

Q. Illustrate Modern Method of Measurements? Holding Period Yield: The holding period yield is one of the modern techniques on Measuring return. It serves two purposes: a) I

Sensex, What is Financial index & commodity index? Method of index uses in ...

What is Financial index & commodity index? Method of index uses in calculation? Weighted average method? How to calculate index?

Clearing and settlement - t- bills, Clearing and Settlement The Treasur...

Clearing and Settlement The Treasury Bills are available in physical form if an investor desires so. The market is mostly dominated by institutional players who have a facility

How is present value affected by change in the discount rate, How is presen...

How is present value affected by a change in the discount rate? Present value is inversely associated to the discount rate.  In other words current value moves in the opposite

Dividends, Company X is expected to maintain a constant 7% growth rate in t...

Company X is expected to maintain a constant 7% growth rate in their dividends, indefinitely. If company X has a dividend yield of 4%, what is the required return on their shares?

Market efficiency, Market Efficiency Though there are various markets p...

Market Efficiency Though there are various markets present in the financial system, the ease with which the transfer of funds take place depends on the level of efficiency pres

Cash forecasting and budget, Cash Forecasting and Budget: It is used t...

Cash Forecasting and Budget: It is used to get an idea of what a cash forecasted budget any might expect to earn in a fiscal year. You take last year's expenses, increased by

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd