The stated assigned value to a security decided by the issuer. The total equity capital is divided into multiple shares with the same face value. Face values are used to denote the share capital and any value excess to the par value is called the additional paid-in capital.
Normaland preferred dividend payments are expressed as a percentage of the face value as it does not get change with the market trading. The face value can be changed only during the stock split.
If total share capital issued is Rs 1000 and number of issued shares is 100, then the face value of each share will be Rs 10.
Part of profits made by the listed company is paid out in terms of dividends to all the common and preferred shareholders. The dividend amount is expressed as the percentage of the face value of the share.
The preference shareholders receive dividends after each quarterly result announcement at the fixed rate which was defined at the time or issuing the preference shares. The dividends payout to the common shareholders is decided by the company management and may be deferred because of lower than expected profit or loss or a particular period.
The percentage of dividends paid to the shareholders is known as dividend payout ratio which is calculated as
Dividend Payout (%) = Dividend Per Share/Earnings Per Share
The rest of the amount is kept as retained earnings to fund the business expansion plan in future.