These terms often sound similar but they are considerably different.
Face Value
This is the value per share, which is fixed at the time of registration of the company. It is also known as nominal value or par value. This is the value per share, which is recorded in the memorandum of Association. It is used for calculating the premium, if the shares are issued at premium, and for calculating the dividend per share, whenever it is paid.
It is a arbitrary figure usually Re 1, Rs 5 or Rs 10.
Based on face value per share the total share capital of the company is divided into certain no of shares.
Issue Price
This is the price at which the shares are issued for subscription. The shareholder has to pay this amount per share to the company. If the shares are issued at par, then it is same as the face value. If the shares are issued at a premium, then it is higher than the face value. If the shares are issued at a discount, then it Is less than the face value. Once the shares are issued then the issue price does not hold any further importance.
Market Price
Market price is the price which is paid for buying the shares from the secondary market. It is determined based on the future prospects of the company and also by the demand and supply for the company's shares in the stock market.
