A stocks market value is
Market value or OMV Open Market Valuation is the price at which an asset would trade in a competitive auction setting.
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Market value is often used interchangeably with open market value , fair value or fair market value , although these terms have distinct definitions in different standards, and may differ in some circumstances. The concept is most commonly invoked in inefficient markets or disequilibrium situations where prevailing market prices are not reflective of true underlying market value.
For market price to equal market value, the market must be informationally efficient and rational expectations must prevail. In this perspective, they suggest to implement new methodologies able to bring strategy back into financial performance measures.
Market value is also distinct from fair value in that fair value depends on the parties involved, while market value does not. For example, IVS currently notes fair value "requires the assessment of the price that is fair between two specific parties taking into account the respective advantages or disadvantages that each will gain from the transaction.
Although market value may meet these criteria, this is not necessarily always the case.
Fair value is frequently used when undertaking due diligence in corporate transactions, where particular synergies between the two parties may mean that the price that is fair between them is higher than the price that might be obtainable in the wider market. In other words "special value" may be generated.
Market value requires this element of "special value" to be disregarded, but it forms part of the assessment of fair value.
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The term is commonly used in real estate appraisal , since real estate markets are generally considered both informationally and transactionally inefficient.
Also, real estate markets are subject to prolonged periods of disequilibrium, such as in contamination situations or other market disruptions. Appraisals are usually performed under some set of assumptions about transactional markets, and those assumptions are captured in the definition of value used for the appraisal. Commonly, the definition set forth for U. In the USA, Licensed or Certified Apppraisers may be required under state, federal, or local laws to develop appraisals subject to USPAP Uniform Standards of Professional Appraisal Practice.
The Uniform Standards of Professional Appraisal Practice requires that when market value is the applicable definition, the appraisal must also contain an analysis of the highest and best use as well as an estimation of exposure time. All states require mandatory licensure of appraisers. It is important to note that USPAP does not require that all real estate appraisals be performed based on a single definition of market value. Indeed, there are frequent situations when appraisers are called upon to appraise properties using other value definitions.
If a value other than market value is appropriate, USPAP only requires that the appraiser provide both the definition of value being used and the citation for that definition.
Market value is the most commonly used type of value in real estate appraisal in the United States because it is required for all federally regulated mortgage transactions, and because it has been accepted by US courts as valid. However, real estate appraisers use many other definitions of value in other situations.
Liquidation value is the most probable price that a specified interest in real property is likely to bring under all of the following conditions:. This value definition differs from the previous one in that it assumes an orderly transition, and not "extreme compulsion".
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For land acquisitions by or funded by U. When a real estate appraiser works with a business valuation appraiser and perhaps an equipment and machinery appraiser [8] to provide a value of the combination of a business and the real estate used for that business, the specific market value is called "going concern value.
Use value takes into account a specific use for the subject property and does not attempt to ascertain the highest and best use of the real estate. For example, the appraisal may focus on the contributory value of the real estate to a business enterprise. Some property tax jurisdictions allow agricultural use appraisals for farmland. Also, current IRS estate tax regulations allow land under an interim agricultural use to be valued according to its current use regardless of development potential.
Stability and economic growth are two factors that international investors are seeking when considering investment options. A country offering economic value amongst its other incentives attracts investment funds.
A political unrest situation can be the cause of not only loss of confidence, but a reduced value in currency, creating transfer of capital to other and more stable sources. In the event of a government printing currency to discharge a portion of a significant amount of debt, the supply of money is increased, with an ultimate reduction in its value, aggravated by inflation.
Furthermore, should a government be unable to service its deficit by way of selling domestic bonds, thereby increasing the supply of money, it must increase the volume of saleable securities to foreigners, which in turn creates a decrease in their value. A significant debt can prove a concern for foreign investors, should they believe there is a risk of the country defaulting on its obligations.
They will be reluctant to purchase securities subject to that particular currency, if there is a perceived, significant risk of default.
Currency values and exchange rates play a crucial part in the rate of return on investments. Value for an investor, is the exchange rate of the currency which, contains the bulk of a portfolio, determining its real return.
A declining value in the exchange rate has the effect of decreasing the purchasing power of income and capital gains, derived from any returns. In addition, other income factors such as interest rates, inflation and even capital gains from domestic securities, are influenced by the influential and complex factors, of the exchange rate.
The case of Luxmoore-May and Another v. Messenger May Baverstock [] 1 W. What better guide could there be to that value than the price at which these paintings happened to be knocked down at Sotheby's so shortly afterwards? The price which the international art market was willing to pay was surely prima facie the best evidence of the foxhounds' value.
From Wikipedia, the free encyclopedia. For values of entire markets, see Market size. For market value of the shares outstanding of a publicly traded company, see Market capitalization. Integrating EVA and PBC, Business System Review, Vol 1. This definition has also been adopted by the International Association of Assessing Officials for tax assessment purposes.
The Fundamentals of Appraising Machinery and Technical Assets , 2nd ed. Retrieved 6 January Retrieved from " https: Real estate Real estate valuation Financial markets. All articles with unsourced statements Articles with unsourced statements from April Navigation menu Personal tools Not logged in Talk Contributions Create account Log in. Views Read Edit View history. Navigation Main page Contents Featured content Current events Random article Donate to Wikipedia Wikipedia store. Interaction Help About Wikipedia Community portal Recent changes Contact page.
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