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It is illegal for a company to offer its shares for less than its nominal value, therefore, the market value must not be lower than its nominal value, right?
I could not understand why the answer to the following question is D.
Which of the following is correct concerning the market value of a company’s shares?
A Market value must be greater than nominal value
B Market value must be lower than nominal value
C Market value equals nominal value
D Market value may be equal, greater or lower than nominal valueYour original sentence is incorrect!
Market value is determined by market forces and has nothing to do with the nominal or face value of a share
A share with a nominal value of $1 may be traded on a stock exchange for any price at all – higher or lower than $1 – the price agreed between the buyer and the seller of that share is exactly that … it’s the price that they agree on and that has nothing to do with the nominal value
OK?
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