Perhaps the best method for estimating the market value of shareholders' equity is to:

Question

Quizplus · Accepted Answer

Multiplying the number of shares outstanding by the price of each share will provide an estimate of the market value of shareholders' equity. This takes into account the current market demand and investor sentiment towards the company, which may not be reflected on the balance sheet or income statement alone. Adding retained earnings to total liabilities may overestimate the value of shareholders' equity since it does not consider the current market price of the company's shares.

Perhaps the Best Method for Estimating the Market Value of Shareholders