ABC Company owns stock in XYZ Company.The stock is traded on the New York Stock Exchange and the London Stock Exchange.Stock price information from the two stock exchanges on December 31 is as follows：

Exchange Quoted Stock Price Transaction Costs Net

New York $103 $1 $102

London $106 $5 $101

What is the fair value of the XYZ stock on December 31 if there is no principal market for the stock?

a.$101

b.$102

d.$106

Choice “c” is correct. If there is no principal market，then the price in the most advantageous market is the fair value of the stock.The most advantageous market is the market with the best price after considering transaction costs.Although the London quoted market price is higher，after transaction costs the net amount is lower，so New York is the most advantageous market and the fair value is $103.