Face Value (of Bond)
Face value, also known as par value, is the amount of money a bond issuer agrees to pay the bondholder at the maturity date. It is the amount printed on the face of the bond certificate and is usually expressed in the currency of the issuing country. The face value of a bond is the amount of money the issuer agrees to pay the bondholder at the maturity date. It is also known as the par value or principal amount. The face value is usually expressed in the currency of the issuing country.
History of Face Value
The concept of face value has been around since the early days of bond issuance. In the past, bonds were issued with a face value that was equal to the amount of money the issuer was willing to pay the bondholder at the maturity date. This amount was usually expressed in the currency of the issuing country. Over time, the concept of face value has evolved and today, bonds are issued with a face value that is usually lower than the amount of money the issuer is willing to pay the bondholder at the maturity date.
The face value of a bond is determined by the issuer and is usually set at the time of issuance. The face value of a bond is typically lower than the amount of money the issuer is willing to pay the bondholder at the maturity date. This is because the issuer is taking into account the interest payments that will be made over the life of the bond. The face value of a bond is also known as the par value or principal amount.
Comparison Table
| Term | Definition |
|---|---|
| Face Value | The amount of money a bond issuer agrees to pay the bondholder at the maturity date. |
| Par Value | The amount printed on the face of the bond certificate. |
| Principal Amount | The amount of money the issuer agrees to pay the bondholder at the maturity date. |
Summary
Face value, also known as par value or principal amount, is the amount of money a bond issuer agrees to pay the bondholder at the maturity date. It is the amount printed on the face of the bond certificate and is usually expressed in the currency of the issuing country. The face value of a bond is determined by the issuer and is usually set at the time of issuance. For more information about face value, you can visit websites such as Investopedia, The Balance, and Investing Answers.
See Also
- Bond Yield
- Coupon Rate
- Maturity Date
- Interest Rate
- Credit Rating
- Default Risk
- Callable Bond
- Puttable Bond
- Convertible Bond
- Zero Coupon Bond
