What is meant by share discount and premium?

What is discount and premium in stock?

A discount is the opposite of a premium. When a bond is sold for more than the par value, it sells at a premium. A premium occurs if the bond is sold at, for example, $1,100 instead of its par value of $1,000.

What does share discount mean?

What is a Discount Share (Stock)? These are the stocks issued in the market to be sold for less than its nominal value or par value. It also refers to selling shares below the fair market value.

What do u mean by premium?

Definition: Premium is an amount paid periodically to the insurer by the insured for covering his risk. Description: In an insurance contract, the risk is transferred from the insured to the insurer. For taking this risk, the insurer charges an amount called the premium.

What is discount example?

Discount means a reduction off of the normal price for goods or services. An example of a discount is 10 percent off. The definition of discount is reduced prices or something being sold at a price lower than that item is normally sold for. … An example of discount is when you cut prices in your store from $10 to $5.

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How can I get share premium?

Shares are considered to be issued at a premium if the amount received for issued shares is greater than the face value of shares. The premium is calculated by finding the difference between the share issue price and the par value of shares offered for sale.

What is Issue of share at discount?

The issue of shares at a discount means the issue of the shares at a price less than the face value of the share. For example, if a company issues share of Rs. 100 at Rs. 90, then Rs. 10 (i.e. Rs 100—90) is the amount of discount.

What do you understand by issue of share at par at premium and at discount?

When shares are issued at a price equal to their face value it is termed as shares issued at par. When issue price of a share is more than its face value, it is known as shares issued at a premium. If issue price of a share is less than its face value, it is called as shares issued at a discount.

How do you know if a stock is trading at a discount?

When the fund trades above its last quoted NAV it is trading at a premium. When it trades below its last traded NAV it is trading at a discount.

Which shares can be sold at discount?

ADVERTISEMENTS: When Shares are issued at a price lower than their face value, they are said to have been issued at a discount. For example, if a share of Rs 100 is issued at Rs 95, then Rs 5 (i.e. Rs 100—95) is the amount of discount.

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