Face Value

Face value refers to the value of a coin or paper money that is printed on the coin or in the bill itself by the minting authority .Face value generally refers to the true value of a coin or bill in query. It can sometimes be highly symbolic like bullion coins.

The face value of bonds generally stands for the principal or redemption value. The interest payments are also expressed as a percentage of face value . Before the maturity , the actual value of the bonds may either be greater or lesser than the face value . It depends upon the interest rate to be paid and the possible risks involved in the default.

As the bonds come closer to maturity , their actual value approaches face value . In case of stock certificates, the face value is the par value of the stock. If it is a common stock , par value is highly symbolic .

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