Which of the following is true regarding book value?
A)A direct correlation exists between the market value and book value of a stock.
B)Book value calculations may be misleading to investors.
C)Book value is seldom reported in financial publications.
D)Book value is never used to calculate market-to-book ratio.
E)Some investors believe a stock is a bargain when the stock's market value is above its book value.

Question

Quizplus · Accepted Answer

Book value calculations can sometimes be misleading to investors because they may not accurately reflect the company's current market value or the true value of its assets. Factors such as depreciation, market conditions, and accounting practices can affect the book value, making it an imperfect measure for investment decisions.

Which of the Following Is True Regarding Book Value