Difference between face value and market value of shares
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Face value is the original value of the stock which is shown in the share certificate at the beginning when the company gets listed in the stock market.Face value of a share does not change and stays constant.For example, the face value of shares of Infosys is INR 5.
Market value is the total value of the company.Market value is calculated by multiplying the total number of shares outstanding with the current market price of a share.For example, the total number of shares outstanding for ABC company is 50,000 shares and the current market price is INR 200.Thus, the total market value of the company is INR 10000000.
Book value of stock is the value of the company based on the total amount the company owes to its shareholders. It is calculated by dividing the total amount the company owes to the shareholders by the total number of shares.The total amount the company owes to the shareholder is called Sareholders Equity.Thus, if the Shareholders equity is INR 100 crores and the number of shares outstanding is 5 crores, the book value of shares is INR 20 per share.
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Market value is the total value of the company.Market value is calculated by multiplying the total number of shares outstanding with the current market price of a share.For example, the total number of shares outstanding for ABC company is 50,000 shares and the current market price is INR 200.Thus, the total market value of the company is INR 10000000.
Book value of stock is the value of the company based on the total amount the company owes to its shareholders. It is calculated by dividing the total amount the company owes to the shareholders by the total number of shares.The total amount the company owes to the shareholder is called Sareholders Equity.Thus, if the Shareholders equity is INR 100 crores and the number of shares outstanding is 5 crores, the book value of shares is INR 20 per share.
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