If market value is greater than book value, then investors for future stock are considered as___________________?
Correct answer: D. Optimistic
- A. Experienced
- B. Inexperienced
- C. Pessimistic
- D. Optimistic
Explanation
When market value exceeds book value, investors are pricing the stock above its accounting value and generally expressing confidence in its future prospects. This reflects an optimistic outlook rather than pessimism.
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About Business Finance
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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