The book value of equity is seldom equal to the market value of equity.

Question

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The book value of equity represents the value of shareholders' equity as reported on a company's balance sheet, based on accounting principles. On the other hand, the market value of equity is the current price of a company's shares in the stock market, based on supply and demand. These values rarely match due to various factors such as market conditions, industry trends, management performance, etc.

The Book Value of Equity Is Seldom Equal to the Market