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Trading and Investment Terms

Half Stock

A half stock can be defined as a stock sold with a face value that is half of what is viewed as to be the standard price. The face value alludes to the par value of a bond, or in some circumstances, a stock.


Half stock can be a preferred stock or common stock and, other than the diminished face value, acts as a normal share of security.


The face value of a normal equity of a company is $200, this implies that half stock has a face value of $100.


The valuation of an equity of common stock is generally the same for both a regular equity of stock and half stock since a significant part of the security's value is identified with development potential.


Face value is a significant factor in deciding the dividend of an equity of stock, making it increasingly significant for preferred stock.


Moreover, preferred stock might have a higher case on the returns of an organization that was liquidated, generally equal to its face value.


A half stock equity of preferred stock would possibly get less in liquidation.


Face value is more usually an expression utilized while taking about bonds, which means the par value of a bond, reflecting the principal sum that the lender, or investor, is lending to the borrower, or issuer.