Chapter 3 · Stock Market Basics
The four values a share has at once
Face value, book value, market price and intrinsic value are four different numbers, and confusing them is the most common beginner error.
6 of 66 · 9 min
| Value | What it is | Who sets it |
|---|---|---|
| Face value | The nominal value on the certificate | The company at issue — Rs 100 for most Nepali shares |
| Book value | Net assets ÷ shares | The accounts |
| Market price | What it last traded at | Buyers and sellers, continuously |
| Intrinsic value | What the business is actually worth | Your analysis — and it is an estimate |
Only market price is observable. Book value is computed. Intrinsic value is estimated, and two careful analysts will reach different numbers. Face value is an accounting convention that tells you almost nothing.
Worked example
A share with face value Rs 100, book value Rs 140, trading at Rs 210, which you estimate is worth Rs 260.
- P/B = 210 ÷ 140 = 1.5 — the market pays 1.5× stated net assets.
- Margin of safety = (260 − 210) ÷ 260 = 19% — your buffer if the estimate is wrong.
- Face value of Rs 100 is irrelevant to all of it, except that dividends in Nepal are often declared as a percentage of face value.
Saved in this browser only — there is no account to create. Clearing your browser data clears your progress.