Nominal Share Values

[David H]

Further to my previous question, my share certificate is 2.5p ordinary shares, which gave me the impression they had a low value. But of course the value of shares changes constantly, and when I checked it bore no relationship to it.

Does it refer to the original price on the initial sale or something else?

[KJN]

The answer is something else, a nominal value of a share is ascertained by how much in share value the Company wanted to raise when floated. i.e. If a company starts up and wants to raise £100 they can raise this by many different values for example 100 shares of value £1 per share or 500 shares of 20p per share or 4000 shares of 2.5p per share. Hope this helps.

[ABerrant]

Indeed, it is the par value or face value of the share at issue which is different to the market value as they are traded.