The difference between the market values of assets and liabilities is the market value of the shareholders' equity claim.

Question

Quizplus · Accepted Answer

This statement is true as the market value of shareholders' equity represents the residual claim on a company's assets after all liabilities have been accounted for. This means that if the market value of assets is greater than the market value of liabilities, then the difference is the market value of shareholders' equity. Conversely, if the market value of liabilities is greater than the market value of assets, then the shareholders' equity would have a negative value.

The Difference Between the Market Values of Assets and Liabilities