When shares are sold at less than the nominal value, it means they are issued at
Answer Details
When shares are sold at less than the nominal value, it means they are issued at a discount.
Nominal value, also known as face value, is the original value of a share stated in the company's memorandum of association. If shares are issued at a price lower than the nominal value, it is considered a discount. This could occur when a company is in need of capital and is willing to offer shares at a lower price to attract investors.
For example, if a company's nominal value of a share is N10 and the shares are sold at N8, then the shares are issued at a discount of N2 per share. The discount amount would be shown separately in the financial statements as a deduction from the share capital.