True or False Market value of equity can sometimes be negative

Finance Aug 23, 2020

True or False

Market value of equity can sometimes be negative.

Expert Solution

Market value of equity can never be negative or equal to zero because the market value of equity is the product of company's market share price and number of shares outstanding.

Market share price and number of shares outstanding can never be equal to zero or below zero. So, the market value of equity can never be negative.

So, the given statement is false.

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