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Share And Dividends

A person needs a huge amount of money to start a company or business. A person cannot effort such a huge amount alone. For this he forms a joint stock company to collect required capital from the public. The entire estimated capital is divided into equal small units of values Rs.10 or Rs.50 or Rs.100. These units are called shares.

The person who purchases these shares are called share holder of the company. The original price of the share is called “face value” or “nominal value” of the share. The price at which the share is sold or purchased in the market is called "market value” or “cash value”. The market value may be more than or less than the face value.

If the market value of the share is more than the nominal value it is called a premium share or above par. If the market value is equal to nominal value it is called at per. If the market value of share is less than its face value then it is called a discount share or below par.