Because we know that the book value per share is 5.

So that's fine.

I'm going to talk about two stories today.

It's the best price that someone's willing to give you for something.

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

So we have to be careful.

So let's call that market equity.

Our price is considerably higher than the current market price.

I'm just making up numbers.

So I'll pay 2 per share, which is a little bit of premium over the market value at the time, which was 1.

Anyway, fair enough.

So maybe I have a a billion of these CDOs.

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

He sells that share and he gets 100 for it.

And these are the same people now, they're very adamant, that says, oh don't believe the market price.

And this calculation, this multiplication of market price per share times the number of shares this is called the market cap

And with that, there's gonna be some electricity and stuff, we won't count all of it..you can produce some cotton. Just the plant cotton. Some raw cotton.

And that tells you that the book value per share is 4.

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

And this is very relevant to what's going on in the world today.

The price of admission.

So 5 million divided by 1 million is 5.

I'm going to make money that I otherwise wouldn't have made.

So I'm willing to give you 1 billion for those CDOs.

With this price, your product would not be competitive in the Japanese market.

Here, what multiple are we paying?

So using FrontlineSMS they were able to group people into different categories and these people included farmers, who might want to know the coffee prices in different markets,

let's say that they are traded in some market.

And I'll do a bunch of videos on margins in the future.

The market drop has cleaned me out.

If you expect the future price to go up and the good or the product in question is something that you can store, well, depending on how much you expected to go up, you're probably more likely to buy now buy before the price goes up.

And what we'll do in future videos is we'll actually explore situations in which that does happen.

Let's look at these cases a little bit more carefully and figure out what's going on.

They're arguing that the few people who transacted did it out of desperation.

But let's parcel it a little bit more, cause these terms can be interesting.

So I don't buy it on two counts.

It's very simple. It's cost plus markup.

So what's leftover?

And then kind of the third common errors, my price hast to be less than my competitor's price.

So if you have a help at home, if you go to the doctor, the market value of all of those things are going to be put into GDP.

So once again, on the vertical axis, we're going to put price, and on the horizontal axis, we put quantity, and then over here

I actually wrote that down here.

And maybe people would short Company A, and the price would move down.

Because when the company needs to raise money, that is used as kind of the fair market value of a company's shares.

So what's eventually going to happen with the demand increases the price will go up in this market and when the supply increases in this market, the price will go down.