If book value is greater than market value comparison with investors for future stock are considered as_______________?
Correct answer: A. Pessimistic
- A. Pessimistic
- B. Optimistic
- C. Experienced
- D. Inexperienced
Explanation
When book value exceeds market value, investors are valuing the stock below its accounting value, suggesting doubt about its future prospects. This represents a pessimistic outlook.
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Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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