• What determines value in financial markets? We cover valuation of bonds and common stocks in Chapters 3 and 4. We will return to valuation principles again and again in later chapters. Sometimes the financial manager may be lucky and find an almost identical asset whose value is already known. The idea that identical assets must have the same value is known as the law of one price. But there is no identical asset to Shell’s offshore oil field in the Gulf of Mexico or GlaxoSmithKline’s investment in research. For most major financial decisions, the manager needs some fundamental principles to help him to determine value.