Nominal value of shares, and value of deferred shares.

[Rev. Green]

What determines the nominal value of a share?

Each GKN share with a nominal value of 50p has been replaced by an ordinary share with a nominal value of 10p and a deferred share with a nominal value of 40p.

Are there any circumstances in which the deferred shares will have any value?

I understand how nominal values of shares change when (say) each share is split into five, or when (say) four shares are merged into one. This question is about whether the nominal value ever becomes a real amount e.g. when a company is wound up.

[dr b]

The nominal value is just an accounting fiction that has nothing to do with the actual market value of the shares:

http://www.completeformations.co.uk/companyfaq s/shareholders/nominal_value.html

A deferred share is a share that is last in line behind the common shares in terms of receiving dividends or getting paid off in a liquidation. For a healthy firm the deferred shares will have value; you'd get worried if the firm got into financial distress (as you are last in line to get paid, if there's anything left after paying off debts).

In no circumstance does the nominal value of the shares come into play in determining the actual (market) value of the stock.