Book Value

The value of a company based on the numbers on the “books.” It’s the estimated worth of a company if the business were shut down and everything sold. Book value is the opposite of market value, where companies feel more valuable than their books would suggest. Buzzy tech companies like Apple experience a higher market value than what the underlying business is doing. The concept is analogous to valuing your car by Kelly Blue Book. There’s a value based on stats of age and mileage. But if, for some reason, Brad Pitt was seen in your car, what you could get for the car would go way up. (See also: Valuation)

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