Question

What is the face value of share $\times $ number of share called:
A). Book value
B). Market value
C). Total nominal value
D). Fair value

Answer 1

Hint: First we will understand the meaning of the face value of the share and then we will see what happens when we multiply it by the number of shares and that new term is called and we will also look at the definition of that new term.

Complete step-by-step solution
Let’s first look at the definition of face value:
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate.
Now let’s see what happens when we multiply it by the number of shares.
A company's market capitalization is a measure of what its market value is. Market capitalization is calculated by taking the current share price and multiplying it by the number of shares outstanding.
Hence, this is the definition of market value and which is exactly similar to as given in the question.
Market value = face value of share $\times $ number of share.
Hence, from this, we can conclude that option (b) is correct.

Note: We must understand the meaning of each of these definitions to understand the question better. And to avoid confusion there are some terms with some different names, so don’t get confused while understanding.