Investors should never pay more than book value for a stock.

Question

Quizplus · Accepted Answer

The statement is false. Investors should not rely solely on book value when determining the value of a stock. Other factors, such as earnings, growth potential, and industry trends, also play a crucial role in determining a stock's value. Additionally, some stocks may trade at a premium to book value if investors have confidence in the company's management and future prospects.

Investors Should Never Pay More Than Book Value for a Stock