Market value of shares
A share's market value is the price at which it can be traded in a market at a particular time. For a quoted company, multiplying market price per share by the relevant number of shares gives market capitalisation. A market price changes as investors reassess prospects and risk. It is not the amount reported as nominal share capital in the company's accounts.
Worked example
A parent issues 10,000 shares with an acquisition-date market value of $3 each to acquire a subsidiary. Their fair-value consideration is $30,000, regardless of a lower nominal share value.
Common mistake
Market value differs from nominal value and is not necessarily the value of a new issue.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | FA | Direct | September 2026–June 2027 |
| ACCA | K1 | Supporting | July 2027–August 2028 |
| FIA | FFA | Direct | September 2026–June 2027 |