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Is the given affirmation of an accountancy expert true

Is the given affirmation of an accountancy expert true? “There valuation criterion that reflects the value of the shares of a company in the most accurate way is based on the amount of the equity of shareholder of its balance sheet. Stating that the value of shares of company equals its book value is a valid argument.”

E

Expert

Verified

In 2005 to 2008, the market value of the shares of listed Spanish companies was over the triple their book value. Similar thing happened with the stock markets in all occidental countries, whether less than 1 percent of the companies had a higher book value than their market value.

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