The Book Value of a Stock Is Equal to the Result

question 140

True/False

The book value of a stock is equal to the result of total assets less total liabilities divided by the number of outstanding shares of common stock.

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Definitions:

Equity Capital

Funds raised by a company in exchange for a share of ownership in the company.

Venture Capital

Financing that investors provide to startup companies and small businesses that are believed to have long-term growth potential.

Factoring Accounts Receivable

A financial transaction where a business sells its accounts receivable to a third party at a discount, in order to obtain immediate cash flow.

Face Value

The nominal value or original monetary worth of a security or financial instrument as stated by the issuer.