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16 September, 01:54

20. Which of the following is correct? a) A company's book value reflects the company's history of equity investment and retained earnings; a company's market value reflects investors' view of the company's future earnings prospects. b) A company's market value reflects the company's history of equity investment and retained earnings; a company's book value reflects investors' view of the company's future earnings prospects. c) A company's book value and market value both reflect the company's history of equity investment and retained earnings d) A company's market value and book value both reflect investors' view of the company's future earnings prospects.

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  1. 16 September, 02:18
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    a. A company's book value reflects the company's history of equity investment and retained earnings; a company's market value reflects investor's view of the company's future earning prospects.

    Explanation:

    The book value of a company is the residual equity and retained earnings after all liabilities paid. Market value is the view of investor's about the company and is what the company would be worth if it were to be sold.
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