June 6th, 2007 Comments off
When a company issues shares or debentures, one of the following three (3) scenarios might occur:
- Issuance AT PAR
- Issuance AT A PREMIUM
- Issuance AT A DISCOUNT
|Issuance AT PAR||A share or debenture of (say) $1 each nominal value would be issued for $1 each.|
|Issuance AT A PREMIUM||At a premium a price above the share’s nominal value. For example, if the nominal value of a share is $1, the share would be issued for more than $1, say for $1.10 or a $100 debenture for $120|
|Issuance AT A DISCOUNT||Shares of $1 each might be issued at say $0.90 which is below its nominal value|
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