When a share is bought at a rate below the par value, it is said to have been sold?
Answer Details
When a share is bought at a rate that is lower than its par value, it is said to have been sold "at a discount." This means that the buyer is paying less for the share than its nominal or face value. For example, if the par value of a share is $10, and it is bought for $8, then it is sold at a discount.
"On the other hand, if a share is bought at a price that is higher than its par value, it is said to have been sold "at a premium." In this case, the buyer is paying more than the nominal or face value of the share. For example, if the par value of a share is $10, and it is bought for $12, then it is sold at a premium.
"Cum div" refers to the fact that the buyer of a share is entitled to receive any dividends that have been declared or paid by the company up to the date of purchase. "Ax-div" refers to the fact that the buyer of a share is not entitled to receive any dividends that have been declared or paid by the company prior to the date of purchase.
"Pro-rata" refers to the fact that shareholders are entitled to receive dividends in proportion to their shareholding. For example, if a company declares a dividend of $1 per share and a shareholder owns 100 shares, then they will receive a dividend of $100 (100 x $1).