what is face value of share

The face value of a share is the nominal value of the share as stated by the issuing company. It is the value at which a company issues its shares and is mentioned on the stock certificate. For stocks, the face value is the original cost of the stock, as listed on the certificate. It is different from the market value, which is the current price of the stock in the stock exchange. The face value is important for calculating various financial ratios and measures like earnings per share, price-to-earnings ratio, and return on equity. It is also used by the company to calculate the accounting value of its shares and is mentioned in its balance sheet