🔍 What is the Difference Between Book Value and Market Value in the Stock Exchange? How is it calculated?
- The book value (DD) on the stock market shows the accounting value of a company. It is equal to the equity of the company.
- The market value (PD) in the stock market is the product of a company's stock price and its number of shares. It is equal to the market capitalization of the company.
- The difference between the book value and the market value in the stock market represents the difference between the market valuation of the company and its valuation by accounting.
- How is the difference between book value and market value calculated in the stock market? It is calculated using the PD/DD ratio. The PD/BV ratio is obtained by dividing the stock price by the equity value per share.