what is face value 
face value is a financial term used to describe a security s nominal or dollar value as given by its issuer for bonds it s the amount paid to the holder at maturity the face value of bonds is often called par value or simply par 1for stocks the face value is the stock s original cost as listed on the certificate in reality the par value of a stock is unimportant it can be set at a low arbitrary amount especially in countries like the u s many u s companies deliberately issue stocks with very low par values due to specific state regulations these rules tie the cost of incorporating a company to the par value of the registered shares by assigning low par values to their stocks companies can decrease their incorporation fees below we review what else you need to know about par or face value investopedia paige mclaughlinunderstanding face valuein bond investing face value par value is the amount paid to a bondholder at the maturity date as long as the bond issuer doesn t default however bonds sold on the secondary market fluctuate with interest rates for example if interest rates are higher than the bond s coupon rate then the bond is sold at a discount below par conversely if interest rates are lower than the bond s coupon rate the bond is sold at a premium above par while the face value of a bond provides a guaranteed return the face value of a stock is not an indicator of its actual worth 1face value and bondsa bond s face value is the amount the issuer provides to the bondholder once maturity is reached a bond may either have an additional interest rate or the profit may be based solely on the increase from a below par original issue price and the face value at maturity while bond par values are generally static a notable exception is inflation linked bonds whose par values are adjusted by inflation rates for preset periods face value and stock sharesthe sum face value of the entirety of a company s shares establishes the legal capital a corporation is obligated to maintain only the above and beyond capital may be released to investors through dividends in essence the funds that cover the face value function as a type of default reserve however there is no requirement dictating the face value businesses must list upon issue this gives companies the leeway to use very low values to determine the size of the reserve for example the par value of at t inc t shares is listed as 1 per common share while shares of apple inc aapl have a par value of 0 00001 23face value vs market valuethe face value of a stock or bond does not equal its actual market value market value is determined based on principles of supply and demand which are governed by the dollar figure where investors are willing to buy and sell the security at a given time depending on market conditions the face value and market value may have very little correlation in the bond market interest rates compared with the bond s coupon rate may determine if a bond sells above or below par zero coupon bonds or those where investors receive no interest aside from that associated with purchasing the bond below face value are generally only sold below par because that s the only feasible way an investor can receive a profit 