Which would you expect to be more stable over time, a firm’s book-value or marketvaluecapital structure? Explain.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Which would you expect to be more stable over time, a firm’s book-value or marketvalue
capital structure? Explain.

Expert Solution
Step 1

firm's book value :

it is the value of firms assets found in the balance sheet and equal to total amount shareholders would get at the the time of liquidation

market value capital structure: 

how the the asset of the firm is worth in the financial market.

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