Which of the following is a reason why a company's market value of equity differs from its book value of equity?
A) Shareholders are keenly aware of book values,but have little interest in market values.
B) Accountants' charges for the cost of equity are often higher than they should be.
C) Fair value accounting is becoming more widely used.
D) Values of assets on the balance sheet typically reflect historical cost,adjusted for appropriate depreciation.

Question

Quizplus · Accepted Answer

The book value of equity is based on the historical cost of assets, adjusted for depreciation, which often differs from their current market value. This can lead to differences between the book value and market value of a company's equity.

Which of the Following Is a Reason Why a Company's