Definition of nominal value
All shares have a nominal or par value. This value bears no relation to the market price of the shares, which is determined by supply and demand. The nominal value is usually the very first issue price of the shares. From then onwards, the nominal value is of little significance except that legally, shares cannot be issued at a price below nominal value. When shares are issued, the nominal value is recorded in the balance sheet as share capital and any amount paid over nominal value is recorded as share premium.
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