When a share with a nominal value of N50 is quoted at N70, it is being sold

Assessment: WAEC SSCE - Commerce - 2022 (Objective) Subject: Commerce

Question 1 Report

When a share with a nominal value of N50 is quoted at N70, it is being sold
Answer Details
When a share with a nominal value of N50 is quoted at N70, it is being sold "at a premium". This means that the market value of the share is higher than its face value or nominal value. In other words, investors are willing to pay more than the actual value of the share because they expect the company's profits to increase, and the share price to rise further in the future. This is a common occurrence in the stock market, and it reflects the demand for the company's shares by investors.
Read lesson note on Stock Exchange (JAMB)
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