Question

When shares are issued at a price equal to the face value, they are said to be issued at____.

• A. Discount
• B. Premium
• C. Par
• D. None of the above

Answer 1

Answer: (C)

Par

Shares of a company are actually ownership of a company. So every shareholder is a part owner of the company in which he owns shares. A company can issue its shares either at par, at a premium or even at a discount. The shares will be at par is when the shares are sold at their nominal value or face value. Shares sold at a premium cost more than their nominal value, and the amount in excess of the face value is the premium. And of course, shares sold at discount cost less than the face/nominal value. This means that when shares are issued at the face value means when the issue price is equal to the face value then it is called as the issue of shares at par.