asset value

Asset value is an important component of a company’s total value, and it can be computed in a number of ways. One approach determines asset value by calculating what those assets are worth to their owners. According to this measurement principle, the economic…

…of the cost of an asset over its economic life. Depreciation covers deterioration from use, age, and exposure to the elements. It also includes obsolescence—i.e., loss of usefulness arising from the availability of newer and more efficient types of goods serving the same purpose. It does not cover losses from…

… and the empirical analysis of asset prices. Fama showed that it is very difficult to predict asset-price movements in the short run, because markets incorporate any new price-relevant information very quickly. This finding came to be known as the efficient-market hypothesis, and it is widely used in financial economics to…

…research on the variability of asset prices and on the underlying rationality (or irrationality) of financial markets. Shiller in particular was honoured for work in which he showed that variations in the prices of stocks and bonds over long periods occur in predictable patterns that reflect the irrational expectations of…