Why doesn't stockholders' equity equal the market value of equity?

A. Stockholders' equity usually does equal the market value of equity.
B. Investors tend to incorrectly price the market value of equity.
C. It's due to incorrect entries prepared by accountants.
D. It's related to the use of historical cost to report many long-term assets and the expensing of value generating costs such as research and development and advertising.


Answer: D

Business

You might also like to view...

Which of the following retailer practices involves buying more units than needed of a product under a sales promotion in a region where the manufacturer offers a promotion deal and shipping the surplus to their stores in nondeal regions?

A) diverting B) panic buying C) hoarding D) stockpiling E) forward buying

Business

MacMillan’s portfolio analysis model helps planners recognize program patterns in relationship to organizational ______.

A. goals B. missions C. strategies D. objectives

Business

The mean is simply the arithmetic average.

Answer the following statement true (T) or false (F)

Business

To get a reader's attention and interest, you must offer something that has existed over a long period of time

Indicate whether the statement is true or false

Business