Which of the following statements is true?
A) The market value and the book value of a company's shareholders' equity are usually the same.
B) The market value is usually less than the book value of a company's shareholders' equity.
C) The market value is usually more than the book value of a company's shareholders' equity.
D) The value of the shareholders' equity on the Statement of Financial Position is based on the value of the company's shares in the market.

Question

Quizplus · Accepted Answer

The market value of a company's shareholders' equity is often more than the book value because it reflects investors' expectations of future growth and profitability, whereas book value is based on historical costs.

Which of the Following Statements Is True