Which of the following is correct?
a) A company's book value reflects the company's history of equity investment and retained earnings; a company's market value reflects investors' view of the company's future earnings prospects.
b) A company's market value reflects the company's history of equity investment and retained earnings; a company's book value reflects investors' view of the company's future earnings prospects.
c) A company's book value and market value both reflect the company's history of equity investment and retained earnings
d) A company's market value and book value both reflect investors' view of the company's future earnings prospects.
Answer: a) A company's book value reflects the company's history of equity investment and retained earnings; a company's market value reflects investors' view of the company's future earnings prospects.
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