In which circumstances, is the market based approach to valuation not relevant and useful?

The Market Price Method (or market-based approach) of valuation is not relevant and useful in the following cases: Valuation of a Division of a Company: When only a specific division or segment of a company is being valued, and not the entire listed entity, market prices of the parent company's shares may not accurately reflect the value of that particular division. Unlisted or Thinly Traded Shares: If the shares of the company are not listed on any stock exchange, or if they are listed but very thinly traded (meaning there is infrequent trading and low liquidity), the market price may not be a true reflection of the company's value due to lack of sufficient market activity and price discovery. Mergers involving Unlisted Companies: In the case of a merger where the shares of one of the companies under consideration are not listed on any stock exchange, a market-based approach cannot be directly applied to that unlisted entity. Intention to Liquidate: If there is an intention to liquidate the company and realize its assets to distribute the net proceeds, the market price of its shares (if any) may not be relevant. In such cases, an asset-based valuation approach would be more appropriate. Distressed Companies: For companies in financial distress or facing insolvency, the market price of their shares might be highly speculative or depressed, not reflecting the underlying asset value or potential for recovery. Control Premium: Market prices typically reflect minority shareholdings. When valuing a controlling stake or the entire company, a control premium might be applicable, which the market price alone does not capture.