MARKET VALUE

the amount for which something can be sold on a given market

Market value or OMV is the price at which an asset would trade in a competitive auction setting. 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 or may not differ in some
circumstances.

Overview

Valuing a listed company is a complex task and several different measures are used to arrive at a fair
valuation. While none of the methods are precise and each presents a different version with varying
results, investors use them in combination to get a better understanding of how stocks have performed.
The two most commonly used quantitative measures for valuing a company are market value and book
value.

KEY TAKEAWAYS

Book value is the total value of a business' assets found on its balance sheet, and represents the value of
all assets if liquidated.

Market value is the worth of a company based on the total value of its outstanding shares in the market,
or its market capitalization.

Market value tends to be greater than a company's book value, since market value captures non-
tangibles as well as future growth prospects.