Face Value, Book Value & Market Value
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Face Value, Book Value & Market Value
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Face Value is the original value of share issued mentioned in the share certificate at beginning when co. gets listed on stock exchange. Face value does not change and stay constant unless stock is split. Book Value is the Net worth of the Co. Net worth = Total assets – Total liabilities. Book value per Share equals : Net Worth / Total No. of O/s Shares A company's book value is the amount that the shareholders would receive after all assets were liquidated and liabilities paid off. Market Value is the current trading price of the stock quoted on exchange. Market value is calculated by multiplying the total number of shares outstanding with the current market price of a share. Book value and market value are both helpful in calculating whether a stock is fairly valued, overvalued or undervalued. Follow DevTech Finance on :- Instagram - https://www.instagram.com/devtechfinance/ LinkedIn - https://www.linkedin.com/company/devtech-finance Facebook - https://www.facebook.com/devtechfinance/ Thank You For Watching Please Subscribe To DevTech Finance
Face Value, Book Value & Market Value
- DEVTECH FINANCE STOCK MARKET BASICS FACE VALUE, BOOK VALUE & MARKET VALUE
- FACE VALUE • Face Value is the original value of share issued mentioned in the share certificate at beginning when co. gets listed on stock exchange. • Face value does not change and stay constant unless stock is split. • For example, during the IPO of XYZ Co., the management decided the face value per share to be Rs 10. to raise an equity capital of 1 Cr. which means total of 10 lakh shares issued.
- BOOK VALUE • Book Value is the Net worth of the Co. • Net worth = Total assets – Total liabilities. • Book value per Share equals : Net Worth Total No. of O/s Shares • A company's book value is the amount that the shareholders would receive after all assets were liquidated and liabilities paid off. • For example – Networth of XYZ Co. as in balance sheet is Rs. 10 Cr. and No. of Outstanding Share is 10 Lakhs so, Book Value per Share will be 10 Cr. divided by 10 Lakh shares equals Rs. 100 per Share.
- MARKET VALUE • Market Value is the current trading price of the stock quoted on exchange. • Market value is calculated by multiplying the total number of shares outstanding with the current market price of a share. • Book value and market value are both helpful in calculating whether a stock is fairly valued, overvalued or undervalued. • When the market value is less than book value, the market doesn't believe the company is worth the value on its books. • A higher market value than book value means the market is assigning a high value to the company due to future growth prospects.
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