Market Value

Finance

Quick Definition

Market Value is the current price at which an asset, security, or company can be bought or sold in the open market.

Detailed Explanation

Market Value represents the real-time worth of an asset based on supply and demand. It can apply to stocks, real estate, commodities, or any tradable asset.

For companies, market value is often referred to as market capitalization, calculated as:
Market Value = Share Price × Total Outstanding Shares

Key Points About Market Value

  • Determined by buyers and sellers in the market
  • Fluctuates based on market conditions, demand, and sentiment
  • May differ from book value or intrinsic value
  • Reflects the current perceived worth

Where It Is Used

  • Stock market valuation
  • Real estate pricing
  • Investment decision-making

Market value is important for investors as it helps assess whether an asset is overvalued or undervalued.

Example

"If a company’s share price is ₹100 and it has 1 crore shares, its market value (market capitalization) is ₹100 crore."

← Back to Financial Dictionary