Nominal value

Nominal value is the face value of a security. This amount is printed on the front of the security certificate.  For example, the nominal value of a share of common stock with a par value of $0.01 is $0.01. A common nominal value for a bond is $1,000, which is also the amount that the issuer will pay to bond holders when the bond matures. The nominal value of a share is usually significantly less than the amount that an investor can expect to receive from owning the share.

Nominal value differs from market value, since the market value of a security will vary in accordance with supply and demand. Market value is usually much higher than the nominal value of a share, while it may be higher or lower than the nominal value of a bond, depending on market interest rates.

Related Courses

Corporate Finance 
Treasurer's Guidebook