FUND.OF CORP.FINANCE PKG. F/BU >C<
FUND.OF CORP.FINANCE PKG. F/BU >C<
16th Edition
ISBN: 9781323165997
Author: Berk
Publisher: PEARSON C
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Chapter 2, Problem 4CC
Summary Introduction

Book Value:

The book value of an asset refers to that value at which the asset is posted in the company’s financial statement, the balance sheet to be more precise. There are two ways in which the book value of the assets can be calculated. They are mentioned as under:

FUND.OF CORP.FINANCE PKG. F/BU >C<, Chapter 2, Problem 4CC , additional homework tip  1

Market Value

The market keeps on changing every time. Market value refers to the value of the asset at which it is valued in the market at a particular time. The market value is also referred to as the market capitalization of those companies that are traded publically. It can be calculated as under:

FUND.OF CORP.FINANCE PKG. F/BU >C<, Chapter 2, Problem 4CC , additional homework tip  2

To Identify:

The reasons for the difference in the book value and market value of the assets of a company.

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Chapter 2 Solutions

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