What Is Face Value? | GoCardless
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Understanding the face value of a bond SkiptocontentOpensitenavigationsidebarWhyGoCardless?ForusecaseSubscriptionpaymentsRecurringpaymentsbuiltforsubscriptionsInvoicepaymentsCollectinvoicepaymentsautomaticallyForintegrationsAPIintegrationsPartnerintegrationsGoCardlessforXeroGoCardlessforZuoraForsmallbusinessOverviewImproveyourcashflowKeeptrackofpaymentsReducecostsReducefailedpaymentsIncreaseconversionsForenterpriseOverviewReducechurnReduceinternationalbarriersReducetimetogetpaidReduceoperationalcostsReduceconversionriskCustomersCustomerstoriesCustomersloveusCustomerreferralprogramPartnersAllpartnersGoCardlessforXeroGoCardlessforZuoraGoCardlessforChargifyPricingLearnHelp&SupportCustomerHubTrainingresources,documentation,andmoreFAQCommonquestionsansweredAPIdocumentationGuidesforintegratorsNews&resourcesLatestarticlesCustomerstoriesGuidetoBECSDirectDebitMasteringPaymentsseriesLoginSignupBreadcrumbResourcesFinanceWhatIsFaceValue?TableofcontentsUnderstandingfacevalueUnderstandingthefacevalueofabondFacevalueofabondvs.stockshareFacevaluevs.marketvalueThebottomlineAsfinancialmarketsfluctuate,sodosecurityprices.Ifyou’reinterestedinpurchasingstocks,bonds,oranyothertypeoffinancialsecurity,you’llneedtoknowitsfacevalueforcomparison.Findoutmoreaboutthefacevaluemeaningbelow,alongwithhowitcomparestomarketvalue.UnderstandingfacevalueThefacevaluemeaningreferstoafinancialsecurity’sdollarvalue.Whenyoupurchaseastockatfacevalue,thiswillbelistedonthestockcertificateasitsoriginalcost.Ifyou’repurchasingabond,it’stheamountpaidoutwhenthebondreachesmaturity.Thefacevalueofabondisalsocalleditsparvalue.UnderstandingthefacevalueofabondFacevalueismostusedwhentalkingaboutbondinvestments,soit’shelpfultotakeacloserlookathowthisworks.Abondisatypeofinvestmentsecurityissuedbyeitheraprivatebusinessorgovernmentorganisation.Itactsasaloanorpromisebetweentheissuerandinvestor,usedasawaytodriveupworkingcapitalfortheissueratthetimeofpurchase.Whenyoupurchaseabond,itusuallycomeswithadefinedtermrangingfromoneto30years.Theendofthetermiscalleditsmaturitydate,atwhichpointthebond’sfacevalueispaidtotheinvestor.Bondholdersalsoreceiveinterestpaymentsaccordingtoadefinedcouponrate.Forexample,ifthefacevalueofabondis$1000anditscouponrateis3%,youwouldreceive$30inannualreturns.You’dalsoreceivetheoriginalfacevaluebackwhenthebondreachesitsmaturitydate.However,it’salsoimportanttorealisethatbondscanbesoldonasecondarymarket.Inthesecases,theirvaluecanfluctuateaccordingtochangesininterestrates.Ifinterestratesarehigherthanthebond’scouponrate,thebondissoldbelowparatadiscount.Ifinterestratesarelowerthanthecouponrate,thebondissoldaboveparatapremium.Forthisreason,thefacevalueisnotalwaysindicativeofabond’sactualworth.Facevalueofabondvs.stockshareWe’veestablishedabovethatthefacevalueofabondreferstotheamounttheissuerpaystheinvestoroncematurityhasbeenreached.Whataboutthefacevaluemeaninginrelationtothestockmarket?Astock’sfacevalueisitsoriginalcost,butit’salsoimportanttolookatthebiggerpicturewheninvesting.Whenyouaddtogethertheentiretyofacompany’sstocksatfacevalue,thisisequaltoitsobligatorylegalcapital.Thecompanycanreleasecapitalabovefacevaluetoinvestorsasdividends.Inordertomakesurethatcompaniesareabletocovertheircostsatfacevalue,theyoftenuseaverylowvaluepershare.Forexample,sharesofAppleInc.havebeenlistedwithafacevalueaslowas$0.00001.Facevaluevs.marketvalueFacevaluegivesyousomeideaofastockorbond’spricing,butitdoesn’talwayslineupwiththesecurity’sactualvalue.Thereal-timevalueofastockorbondiscalleditsmarketvalue.Marketvaluegivesamoreaccuratepictureofwhatabondisreallyworth,becauseitreflectswhatsomeonewillpayforitontheopenmarket.Whilefacevalueispredeterminedwhenthestockorbondisoriginallyissued,marketvaluetakesamultitudeoffactorsintoaccount.Theseincludefactorslikeinterestratesandthetimeremaininguntilabond’smaturity.Marketvaluealsoconsiderstheissuer’sfinancialhealth,whichhasamajorinfluenceonthedollarvalueofbothstocksandbonds.ThebottomlineBondsareconsideredarelativelylow-riskinvestmentoption,andfacevaluegivesyousomeindicationofwhatthebondcouldbeworthatmaturity.However,inthecaseofbothstocksandbondsyoualsoneedtotakemarketvalueintoaccounttomaketherightinvestmentdecision.WecanhelpGoCardlesshelpsyouautomatepaymentcollection,cuttingdownontheamountofadminyourteamneedstodealwithwhenchasinginvoices.FindouthowGoCardlesscanhelpyouwithadhocpaymentsorrecurringpayments.GoCardlessmakesiteasytocollectrecurringpaymentsSignupContactsalesRelatedtopicsFinanceRecommendedforyou2minread—FinanceTheDifferentTypesofLossRatioDiscoverthedifferenttypesoflossratioandhowtheywork.2minread—FinanceTheDifferentTypesofLossRatio3minread—PaymentsDoDirectDebitsComeOutonWeekends?2minread—PaymentsAdvancedPaymentsBenefitsforBusiness2minread—FinanceWhatIsaTermLoan?2minread—GrowthTheImportanceofPRforSmallBusinesses2minread3keyinsightsfromtheZuoraSubscribedInstitutechurnresearch2022
延伸文章資訊
- 1What Is Face Value? - The Balance
Face value, also known as par value, represents a nominal value of a stock or bond set by the iss...
- 2What Is Face Value? | GoCardless
Understanding the face value of a bond
- 3Bond Basics | FINRA.org
The vast majority of bonds have a set maturity date—a specific date when the bond must be paid ba...
- 4Par Value - The Nominal or Face Value of a Bond or Stock
A bond's par value is the dollar amount indicated on the certificate, wherein the calculation of ...
- 5How the Face Value of a Bond Differs From Its Price
Face value is equal to a bond's price when it is first issued, but the price changes after that. ...
