Book Value Per Share May Not Approximate Market Value Per

question 13

Multiple Choice

Book value per share may not approximate market value per share because:

• A)the book value is after tax.
• B)book values are based on replacement costs rather than market values.
• C)book value is related to book figures and market value is related to the future potential as seen by investors.
• D)investors do not understand book value.
• E)book value is not related to dividends.

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Definitions:

Net Benefit

The total positive effects or gains of a project or action, after subtracting the costs or negative aspects.

Benefit-Cost Ratio

A financial metric used to evaluate the efficiency of an investment, comparing the benefits received to the costs incurred.

Return On Investment

A financial ratio intended to measure the benefit obtained from an investment relative to its cost.

Program Cost

The total expenses associated with executing and maintaining a specific program.