Consider whence each thing is come, and of what it consists, and into what it changes, and what kind of a thing it will be when it has changed, and that it will sustain no harm.
Marcus Aurelius Antoninus, The Meditations
3.1. ASSET VALUE
What is an asset worth?
The answer is usually expected to be a number X of monetary units (U.S. dollars, euros, pounds sterling, yen, etc.) considered to be equivalent in some sense to the asset. This equivalence may be in the sense of price. For instance, an asset holder may be able to sell the asset to a buyer offering X dollars (to be specific) for it—this is the bid price—or an aspiring owner may have identified a seller asking the same amount—in which case X is the ask, or offer, price. If the asset holder is willing to part with the asset for $X, then the asset is worth at most $X to the holder. Likewise, the aspiring owner who pays $X to become an actual one values the asset at $X or more. Finding a willing counterparty, however, does not mean that a transaction will be completed: The asset holder may conclude that the bid price is too low or the would-be owner may deem the ask price too high. In refusing to transact, they would rely on their assessment of the asset's economic value, that is, the economic benefit conferred on the asset holder.1 The prospective seller and buyer would conclude that the bid or ask price does not reflect the asset's true worth.
Price as a candidate for the measure of an asset's worth ...