Question

A share has a Face Value of \( ₹25 \) and a Market Value of \( ₹16 \). How is the share described and what is the amount?

Options

• At a discount of \( ₹ 16 \)

• At a premium of \( ₹ 9 \)

• At par of \( ₹ 25 \)

• At a discount of \( ₹ 9 \)

Answer 1

Since \( \text{MV} < \text{FV} \), the share is at a discount. Discount = FV − MV = \[ 25 - 16 = ₹ 9 \].