Remember, there's a difference between book value and market value.

The market value could be very different.

The market value equity of 1.5 billion.

So it really depends on the market value.

Ben has actually done a good job of saying the market value of his inventory, the market value of his equipment.

But this is the market value of the assets.

That would have been the market value per share.

It's market value. Just like in a sushi shop.

And this is the market value of the equity, what the market thinks the equity's worth.

The market value tends to be the best representation of the true value of something.

Ethiopia's domestic market is about one billion dollars of value.

So the market cap, or what the market perceives the value of this equity is, the market capitalization, is these two numbers.

But the market value or assets is essentially, what is the market saying the assets are worth?

And then, that gets you to the market value the equity.

But when the market value, or the market cap, is below the book equity, that's the market just saying, hey we're calling your bluff.

So the market value of this avocado is 1 and the market value of this orange is 0.5, then by producing this fruit the market value, the GDP has increased by 0.50 by producing this avocado it's GDP has increased by 1.

They just look purely at the equity value or the market capitalization.

Which implicitly means that the market value of this asset is 210,000.

That's the situation where the market price is above the book value.

But in this case our market cap is below our book value.

So that 1.5 billion value of these CDOs, the market value of these CDOs, is not truly accurate.

If this is the market value so let's say this is the stock price, or the market stock price I'd be skeptical of paying two times the book value.

And then it figures out, what is the market value of your home?

We're willing to say that the market value of your equity is 210,000.

I think that's what I wanted a write here, market value of equity.

And we feel that over the next five years, if Ethiopia can capture even 40 percent, just 40 percent, of the domestic market, and add just 25 percent value to that market, the value of the market doubles.

By applying the same price to earnings, we're saying that the market value of this equity is 210,000, while the market value of this equity is what was it? 189,000.

Let's say that the market value we talked before that the book value per share of this company is 5.

So the first one I'd like to parce is the idea of market value.

Nothing really happened, but the market value has dropped by 200,000 for whatever reason.

So if the market value is 1, what are they saying about the assets?

Fair value whats the current market value today so it sound like very fancy words but its a pretty simple idea

So I said if the value the market is placing on a share is 12.00 per share, that's a 6 billion market cap.

Market

In the last several videos we talked about the difference between the book value and the market value of a company's equity.

Whenever you hear things like book value, and I've done a couple of videos on book value versus market value, but the book value is essentially what you have on your accounting books.

Cost plus market, value pricing, and volume price are all examples of fixed pricing tactics.

In which case, the market value of them would be a billion and a half.

This is 120,000 in equity, market value of equity, he has another 105,000 in liabilites.

We're not going to worry right now what the market value of the shares are.

So what you do is you multiply these numbers to figure out, what is the market value or the market capitalization of the company?

But if the market is saying that this is a 3.00 stock, 3.00 per share, then that says your market value is 1.5 billion.

The troll market! The troll market?

So they're saying essentially that the market cap, and that's equivalent to the market value of the equity, or what the market thinks the equity is worth, that's 1 times 500 million shares.

But anyway, so the market is giving a 12.00 per share value, what does that mean?