The net worth of a firm
A)is usually the same as the firm's market value.
B)is based on current asset costs.
C)is based on current liabilities.
D)None of the options

Question

Quizplus · Accepted Answer

The net worth of a firm is calculated as the difference between its total assets and total liabilities, representing the amount of equity owned by the company's shareholders. It is not necessarily the same as the firm's market value, which is determined by factors such as supply and demand in the market and future growth expectations. It is also not based solely on current asset costs or liabilities, as it takes into account all assets and liabilities regardless of their age or maturity. Therefore, the correct answer is D) None of the options.

The Net Worth of a Firm