Which statement about the face value of a share is true?

Practice question from NISM XV Mock Test 5 — bank. The correct answer is highlighted below with a full explanation.

Options

Dividend is not declared as a percentage of the face value

Correct answer
B

When the market price of a share goes up, the face value goes up proportionately
C

When shares are split, the face value of a share goes up
D

The equity shares and preference shares can have different face values

Why this is the answer

As per SEBI guidelines, companies declare dividends in absolute rupee terms per share rather than as a percentage of face value. Face value remains constant irrespective of market price movements. In a share split, face value decreases, not increases.

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NISM XV Mock Test 5