Question

which of the following statements is most accurate when describing the reasons the market value of a company could be substantially higher than it's book value?a) the form uses equipment that has been fully depreciatedb) the company acquired a smaller company and opted not to recognize Goodwill after the acquisitionc) the projected growth for revenue is higher than in prior yearsd) the company has a substantial amount of deferred revenue

Answer 1

Answer:

c) the projected growth for revenue is higher than in prior years

Explanation:

As there are numbers of reasons for high of market value over the book value but as per the situation given, the most appropriate option is c. that reflects the higher expected revenue growth as compared to previous years as increases in the projected revenue will automatically increase the earning per share of the company that becomes beneficial for the company

Therefore, all other given options are inaccurate.