face value

noun

Updated on: 16 May 2018

1 : the value indicated on the face (as of a postage stamp or a stock certificate)

2 : the apparent value or significance

if their remarks may be taken at face value

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Examples of face value in a Sentence

We paid $100 for tickets that had a face value of $50.

Recent Examples of face value from the Web

At face value, the both-sides nature of the Facebook ads would seem to undermine the intelligence community's assessment that Russia favored Trump.

— callum borchers, Washington Post, "Many Russia-linked Facebook ads weren’t explicitly pro-Trump. That doesn’t mean they weren’t pro-Trump.," 10 May 2018
Some legal experts and defense advocates see the string of recent not guilty verdicts as a sign that jurors and judges are less inclined to take what the FBI says in court at face value.

— eric lichtblau, Time, "The FBI Is in Crisis. It's Worse Than You Think," 3 May 2018
At face value, the island has improved since the initial impact and recovery efforts that followed.

— jhoni jackson, Teen Vogue, "Puerto Rico's Recovery Efforts Continue a Half Year After Hurricane Maria," 16 Apr. 2018
But Rwanda’s literacy rates, life expectancy, and economic growth numbers continue to be taken at face value.

— alex gladstein, The New Republic, "Why Dictators Love Development Statistics," 26 Apr. 2018
On face value, when residents hear about various projects coming to Mecklenburg, they are led by our two largest towns, Charlotte and Huntersville, with our county not being as involved.

— charlotteobserver, "Mecklenburg County commissioner candidates: Where they stand on key issues | Charlotte Observer," 18 Apr. 2018
There's the tawdry true crime series that has no choice but to accept the things that Cameron claims at face value.

— daniel fienberg, The Hollywood Reporter, "'It Was Him: The Many Murders of Ed Edwards': TV Review," 16 Apr. 2018
Rampage takes that exaggerated persona at face value, rather than cleverly undercutting it.

— david sims, The Atlantic, "Rampage Is a Big, Noisy Nothing," 13 Apr. 2018
Taken at face value, the argument of the United States, our government, is that Twitter is a sacred space for Trump and thus out of the Constitution’s reach.

— cristian farias, Daily Intelligencer, "The Newest Frontier in American Jurisprudence Is Trump’s Twitter Feed," 9 Mar. 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'face value.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

First Known Use of face value

1851

in the meaning defined at sense 1

See Words from the same year

NEW! Time Traveler

Financial Definition of FACE VALUE

face value

noun

What It Is

Face value, also referred to as par value or nominal value, is the value shown on the face of a security certificate, including currency. The concept most commonly applies to stocks and bonds, so it is particularly important to bond and preferred stock investors.

How It Works

Face value is an often arbitrarily assigned amount used to calculate the accounting value of a company's stock for balance sheet purposes.

When it comes to bonds and preferred stock, however, face value represents the amount that must be repaid at maturity. Corporate bonds usually carry a $1,000 face value, municipal bonds usually carry a $5,000 face value, and government bonds usually carry a $10,000 face value, though these amounts can vary widely.

Let's assume Company XYZ decides to issue $1,000,000 in bonds to raise capital to help fund the construction of a new factory. If each bond had a face value of $1,000, the company would have to issue 1,000 bonds to meet its $1,000,000 goal.

This bond issue would also pay interest in an amount per bond that is impacted by the amount of the face value. For example, if the bonds paid 5%, it means they will pay interest amounting to 5% of the bond's face value each year. That would mean interest payments totaling $50 annually for a bond with a $1,000 face value.

Why It Matters

Face value is a crucial component of many bond and preferred stock calculations -- including interest payments, market values, discounts, premiums, and yields.

As shown in the example above, the interest on a bond is usually calculated as a percentage of face value. Additionally, bondholders often receive a percentage over the bond's face value as a redemption premium if the borrower decides to repay the debt before it is due (known as a callable bond, this is often done on a sliding scale based on when the bonds are redeemed).

It is important to note that when it comes to stocks, face value (or par value) generally has no relation to market price. Bond prices, however, are heavily influenced by their face value. Bonds are usually quoted as a percentage of face value. However, their prices can climb above (premium) or fall below (discount) their face value based on changes in interest rates and the financial health of the underlying issuer.

Source: Investing Answers