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Corporate Finance

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Market Values vs. Book Values of Equity

CORPFN-YDDR1E

When the market value of equity is less than the book value of equity,

A

the company is on the verge of bankruptcy.

B

investors expect low earning prospects for the firm.

C

the firm is undervalued, and this may be a good acquisition opportunity.

D

the assets of the firm are fully depreciated.