Market Price

Market price is the price at which a security trades in the market at a specified time. A quoted last price, closing price, bid, and ask may differ, so the time and price type should be stated.

A simple example

Suppose a stock closes at $20 on Friday and pays an indicated $1.20 annual dividend. The yield calculated with that closing market price is $1.20 ÷ $20 = 6%. If the stock closes at $15 later with the dividend rate unchanged, the yield calculated at the later price is 8%.

Why this matters to income investors

Market price is the denominator in common measures such as dividend yield and earnings yield. It can move even when a company’s dividend or earnings estimate has not changed. A quoted price is also different from an estimate of a company’s value.

How to use market price in your research

State the exchange, date, and whether a quote is a last trade, closing price, bid, or ask. Use a consistent price date when comparing yields. The price at which an order actually executes can differ from a displayed quote.

This material is general education and information, not individualized investment, tax, or legal advice.