Which of the Following Accurately Describes the Relation Between Book

Multiple Choice

Which of the following accurately describes the relation between book and market value?

A) Financial managers should rely on book values, and not market values, when making decisions for the firm, because the firm's tax liability is based on book values.
B) Financial managers should rely on market values, and not book values, when making decisions for the firm, because the firm's tax liability is based on market values.
C) Book value is an accounting summary of value and is inferior to market value as a source of current information regarding the true value of the firm.
D) The market value of current assets is often difficult to determine, and thus of little value to the decision making process of financial managers.
E) Market value always exceeds book value.