Difference between capitalization and their book value
Is the difference for the value creation in a company among the market value of the shares (capitalization) and their book value a good measure since its foundation?
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No. Value creation in an era is the difference between the return to shareholders and the needed return multiplied by the capitalization at the starting of the period.
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XYZ explained the difference between intrinsic value and book value in terms of the money spent on a college education. Please provide another example using a different simile.
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