- Face value
Face value is the value of a
coin , stamp orpaper money , as printed on the coin, stamp or bill itself by the minting authority. While the face value usually refers to the true value of the coin, stamp or bill in question (as with circulation coins) it can sometimes be largely symbolic, as is often the case withbullion coins. For example, a one troy ounce (31 g)American Gold Eagle bullion coin was worth and sold for about $670USD during 2006 market prices (as of July 17, 2006) and yet has a face value of only $50 USD.The face value of bonds usually represents the principal or
redemption value .Interest payments are expressed as a percentage of face value. Before maturity, the actual value of a bond may be greater or less than face value, depending on the interest rate payable and the perceived risk ofdefault . As bonds approachmaturity , actual value approaches face value.In the case of
stock certificates, face value is thepar value of the stock. In the case ofcommon stock , par value is largely symbolic. In the case ofpreferred stock , dividends may be expressed as a percentage of par value.The face value of a
life insurance policy is the death benefit. In the case of so-called "double indemnity " life insurance policies, thebeneficiary receives double the face value in case of accidental death.The face value of property, casualty or
health insurance policies is the maximum amount payable, as stated on the policy's face or declarations page.Face value can be used to refer to the apparent value of something other than a financial instrument, such as a concept or plan. In this context, "face value" refers to the apparent merits of the idea, before the concept or plan has been tested.
"Taking someone at face value" is assuming another person's suggestion, offer, or proposal is sincere, rather than a bargaining ploy.
ee also
*
Melt value
*Par value (finance)
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