Face Value and Market Value of a Share

This WBCHSE Class 12 Commerce Business Mathematics and Basic Statistics chapter looks at the arithmetic behind owning shares of a company — how much a share is officially worth on paper, how much it actually costs to buy, and how much income it earns its owner.

Face value

When a company is formed, it divides its total capital into a large number of equal units called shares, and prints a fixed price on each share certificate — this printed price is the face value (also called the nominal value or par value) of the share. Face value never changes once a share is issued; common face values in India are ₹10 or ₹100.

Market value

Once shares are listed and traded, their market value is the price at which the share actually changes hands on a stock exchange on a given day — this fluctuates constantly with demand, company performance, and investor sentiment, and is almost never equal to the face value.

• A share trading above its face value is said to be at a premium: $\text{Market Value} = \text{Face Value} + \text{Premium}$.
• A share trading below its face value is said to be at a discount: $\text{Market Value} = \text{Face Value} - \text{Discount}$.
• A share trading exactly at its face value is said to be at par.

Investment amount

The total amount an investor pays to buy $n$ shares is simply

So buying 200 shares of face value ₹10 quoted at a market value of ₹15 costs $200 \times 15 = ₹3{,}000$ to acquire — not $200\times10=₹2{,}000$, which is a very common slip.

The same standard share-market arithmetic taught here — face value, market value, dividend and yield — is a well-established topic across commerce-mathematics curricula nationally, applied here to WBCHSE's own Class 12 Commerce syllabus.