What is Fair Market Value?
The fair market value refers to the price determined between the buyer and the seller in a public transaction in accordance with their own interests under the condition that the relevant knowledge and information of the two parties are basically symmetric on a voluntary basis.
Fair market value
discuss
- Chinese name
- Fair market value
- Foreign name
- fair market price
- Subject
- Economics and Management of Mineral Resources
- Overview
- Voluntary principle between buyer and seller
- The fair market value refers to the price determined between the buyer and the seller in a public transaction in accordance with their own interests under the condition that the relevant knowledge and information of the two parties are basically symmetric on a voluntary basis.
- definition
- The purpose of enterprise value assessment is to determine the fair market value of an enterprise. The fair market value of an enterprise is the present value of the company's future cash flow, the sum of the fair market value of equity and the fair market value of debt, and the higher of the continuing operating value and the liquidation value. For listed companies, only the minority stocks participate in trading every day, and the majority of stocks do not participate in daily transactions. Therefore, the market price of stocks is only the price recognized by minority shareholders, coupled with more serious information asymmetry and frequent fluctuations in stock prices, it may not Fair value.
- The basic condition for an enterprise to continue operating is that its continuing operation value exceeds the liquidation value.