Question

2. What value does the market capture, and how? What value(s) does the market leave unaccounted for? Please explain. a. Please provide a step-by-step explanation for how the market assigns value. b. Please provide an explanation for the value(s) that the market leaves unaccounted for in its valuation process.

Answer 1

Market value of an asset basically captures ifs price and is merely determined using fluctuation in market, number of investors, government policies, etc.

For example an asset like property innFloruda is assigned market value based on its total carpet area and is mutliplied with per square feet rate to get its total value.

The price per square feet is determined using factors like connectivity, growth prospects, distance to nearest most accessible areas, density of population, standard of living, etc.

However these prices are unaccounted of goodwill it creates and the environmental compliance norms. These parameters are unchecked even if being very important. Since these parameters cannot be effectively monitored or measured accurately they are highly ignored.

answered by: anonymous