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Market Value
Market value is a term that can be heard on a daily basis, but do you really know what market value is? Market value is the current price that investors buy or sell common stock or bonds for at a certain time. Market value also applies to any real property. For instance when selling a house the market value is not the price that is being asked for, but rather it is the amount that is actually paid for the house in the end. In essence, market value is determined by the buyers and sellers in an open market.
For this reason, the market value of a product can dramatically change overnight. This is especially true for electronics. The market value of a product can decrease due to a newer model or a completely new product being released, or that there is no more desire for that product on the market anymore.
Market value is one of many other valuation methods that is used as a business tool. Value is determined by what the seller and buyer perceive the given product or asset to be worth. Market value differs from the other methods because it takes into account the investors’ perception of how the company will do with returning their investment.
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