Book vs. market value

Book value can be assumed to be equivalent to accounting value

• True

• False

Book value of equity =

• Share price * Shares outstanding

• Total assets - total liabilities

• Total assets - net financial debt

• None of the above

What is the book value if total assets is $100 mio and total liabilities is $80 mio (in mio $)

Book value per share

• = (Total assets - total liabilities) / Total shares outstanding

• = (Shareholder's equity) / Total common shares outstanding

• = (Shareholder's equity - Preferred equity) / Total shares outstanding

• =(Shareholder's equity - Preferred equity) / Total common shares outstanding

Which statement is false? Market value

• Reflects the true value

• is usually greater than book value

• of equity can be negative

• No statement is false

Market value can be calculated using the following method:

• DCF

• Comparable companies

• Comparable transactions

• All of the above

Book value

• Future based

• Interesting for bondholders

• Accounting based

• Discounted

• Can be negative