Shares are said to be sold at a discount when they are sold
Answer Details
Shares are said to be sold at a discount when they are sold below par value. In finance, the par value of a share is its nominal or face value as stated on the certificate or in the company's financial statements. The par value is typically set when the company is formed and does not usually change.
Selling shares below this par value means that the company is offering them at a lower price than their nominal value. This can occur as a strategy to attract investors when market conditions are tough, or if the company needs to raise capital quickly.
For example: If the par value of a share is $10 and it is sold for $8, it is being sold at a discount of $2 from its par value.
It's important to note that selling shares below par can have implications for a company's perceived financial health and can affect investor confidence. Therefore, companies may do this strategically and with consideration of market reactions.