A. The amount that would be paid to a shareholder in the event that the company is sold to another would be determined by the specifics of the transaction itself, not by the book value per share.
B. The market and book value of the shares may be different and a greater market price does not indicate an overvalued share. This may happen if the company owns an asset that has appreciated greatly in value while the company has held it. This asset will be recorded on the books at its lower cost of acquisition and this will lead to an understated book value per share.
C. Because the calculation of book value per share is based on balance sheet amounts, it is very possible that the book value per share will not reflect the current situation of the company. This is demonstrated by assuming that a company owns an asset that has appreciated greatly in value while the company has held it. This asset will be recorded on the books at its lower cost of acquisition, and this will lead to an understated book value per share.
D. The market value and the book may approximate each other, but they do not have to. If the company has an asset that has appreciated greatly in value, this increased value of the asset will not be reflected in book value per share, but the market will have taken it into account when setting the market price of the shares.
