At A Discount

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DEFINITION of 'At A Discount'

This specifically refers to stock that is sold for less than its nominal or par value. At a discount also refers to stocks or other securities that are sold below the present market value, similar to a sale on goods at a retail establishment.

The nominal or par value for a security, which is detailed in the company charter, is the minimum price that a stock of a particular class can be sold for upon an initial public offering. Most states have laws preventing companies from issuing stock at a price less than par.

INVESTOPEDIA EXPLAINS 'At A Discount'

The nominal or par value of a stock arguably has no relation to the market price. In fact, many stocks today aren't even issued with a par value; and those that are often have values that don't in any way relate to the issuing price. For example, in 2012 Google's convertible preferred shares have a par value of $0.001 per share. Selling a stock below market value, on the other hand, is far more common and is typically done as a means of enticing buyers or creating buzz.

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