Definition of Market Price

Market price is a price at which an asset can be bought or sold in an arms’ length transaction. For deciding the market price it is always a priority to look for an active market where a particular asset is bought or sold regularly. In absence of an active market, the market value of an asset can be determined by various methodologies.


Assume the share price of a publicly trading company can be easily obtained from the stock market. Whereas the share price of a company that does not trades its stock on the stock exchange the share price can be calculated using a suitable valuation method. For example dividend valuation model is a suitable valuation model for companies that offer regular dividend payments.

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