We suggest the method of evaluation of illiquid assets on the market in the presence of proportional transaction costs by using two consumption/investment models. We study an investor's implicit evaluation of an illiquid asset whose trading incurs a proportional transaction cost. We show that the investor assigns an implicit value between the bid and ask price and uses it for his investment and/or consumption decisions. We also show that the implicit value is an increasing function of the investor's liquidity ratio, which is a measure of liquidity of the investor's asset holdings.
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