Calculating market value

[marynicolehicks]

I understand how to work out the true value of shares in a company but this is not always what the market trading at. I assume that when a trust is working out what it is worth, it values the shares by what the market is willing to pay (market value), not the true value. Is this is correct?

If it is then when a trust holds a large number of shares (more than the market depth) how do they work out the market value of the shares.

If a trust would impact the price if they sold all their holdings of one particular share, how do they calculate the current market value for the shares?

[OldRider]

The larger an investment owning entity becomes, the more restrictive investment choices become ,so gradually the more their portfolio will become similar to the index and returns not greatly different from the index, for the reasons you are querying.
We avoid the dogs and increase what we favour, to stay ahead of the averages.

Liquidity in companies purchased is an important factor - firstly in being able to buy lesser traded companies in sufficient quantities, secondly to get out of them.

I don't know how the rest of the world works, but I manage a Family trust with a reasonably sized share portfolio, for their annual report all shares are valued at the closing price on the final day of trading of the financial year, this is what the accountant has asked for. By far the greatest portion of investments are in large companies with significant transactions, we would not hold any company where our holding was not much less than an average days trading. This precludes
holding in a lot of cases microcap companies.