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
Scenarios | Meaning |
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 |