Distinction between the book value of a stock

Assignment Help Business Management
Reference no: EM132897478

There is a distinction between the book value of a stock versus the market value. Book value is simply a matter of analyzing the financial statements of an organization in coming to valuation.

However, market value is a matter of what someone is willing to pay for a share of stock. The stock exchanges are typically forward-looking in nature and attempt to anticipate what the future value of a share of stock will be, rather than what it is currently in terms of book value. It is not typical to find a market and book value on the same page with publicly traded organizations. This is particularly true with a company that does an Initial Public Offering (IPO), where anticipation of future grow gets ahead of itself and we end up with extreme multiples of the book price of a share!

One item to note with dividends and stock valuation is - there are a lot of organizations that pay no dividends on shares owned. Authors of textbooks love to gravitate to dividends and in a perfect world, all organizations would pay them. However, in the real world, it is on a by company basis depending on their operating model.

From a personal perspective - can you give an example of book value not equaling market value?

Reference no: EM132897478

Questions Cloud

Different types of signs that are located on airfield : What are the different types of signs that are located on an airfield? How are they marked? What do they mean?
Implement a diversity program : Describes why an organization should implement a diversity program. Assume that the diversity program will have the objective of developing a more diverse
Communication play in effectively managing diversity : What role does communication play in effectively managing diversity? Please provide a detail explanation.
What is the average receivables balance : Dome Metals has credit sales of $396,000 yearly with credit terms of net 45 days, which is also the average collection period.
Distinction between the book value of a stock : There is a distinction between the book value of a stock versus the market value. Book value is simply a matter of analyzing the financial statements of an orga
What are the 5 tips on taking control of finances : Question 1. What are the 5 tips on taking control of your finances?
Reduction and extension of time : He wanted a reduction and extension of time for the payment of his debts. A formal meeting was not requested by any of the creditors. As a result
Conduct a tows matrix analysis : Conduct a (9-quadrant) TOWS matrix analysis of the University of Professional Studies, Accra. (Note: show the numbering of the specific internal and external
Correlation as being real in population : Explain why a t-test is necessary before you accept this correlation as being real in the population.

Reviews

Write a Review

Business Management Questions & Answers

  Caselet on michael porter’s value chain management

The assignment in management is a two part assignment dealing 1.Theory of function of management. 2. Operations and Controlling.

  Mountain man brewing company

Mountain Man Brewing, a family owned business where Chris Prangel, the son of the president joins. Due to increase in the preference for light beer drinkers, Chris Prangel wants to introduce light beer version in Mountain Man. An analysis into the la..

  Mountain man brewing company

Mountain Man Brewing, a family owned business where Chris Prangel, the son of the president joins. An analysis into the launch of Mountain Man Light over the present Mountain Man Lager.

  Analysis of the case using the doing ethics technique

Analysis of the case using the Doing Ethics Technique (DET). Analysis of the ethical issue(s) from the perspective of an ICT professional, using the ACS Code of  Conduct and properly relating clauses from the ACS Code of Conduct to the ethical issue.

  Affiliations and partnerships

Affiliations and partnerships are frequently used to reach a larger local audience? Which options stand to avail for the Hotel manager and what problems do these pose.

  Innovation-friendly regulations

What influence (if any) can organizations exercise to encourage ‘innovation-friendly' regulations?

  Effect of regional and corporate cultural issues

Present your findings as a group powerpoint with an audio file. In addition individually write up your own conclusions as to the effects of regional cultural issues on the corporate organisational culture of this multinational company as it conducts ..

  Structure of business plan

This assignment shows a structure of business plan. The task is to write a business plane about a Diet Shop.

  Identify the purposes of different types of organisations

Identify the purposes of different types of organisations.

  Entrepreneur case study for analysis

Entrepreneur Case Study for Analysis. Analyze Robin Wolaner's suitability to be an entrepreneur

  Forecasting and business analysis

This problem requires you to apply your cross-sectional analysis skills to a real cross-sectional data set with the goal of answering a specific research question.

  Educational instructional leadership

Prepare a major handout on the key principles of instructional leadership

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd