The correct answer is: C. the accounting value of the firm as reflected in the financial statements.
Book value is the accounting value of a company’s assets minus its liabilities. It is calculated by taking the total assets of a company and subtracting the total liabilities. Book value is often used to determine the value of a company’s stock, but it is important to note that book value is not always an accurate reflection of a company’s true value. This is because book value does not take into account intangible assets, such as brand value or customer goodwill.
Option A is incorrect because market value is the price that a company’s stock is currently trading at. Market value is often higher than book value, but it can also be lower.
Option B is incorrect because dividend models are valuation techniques that use a company’s dividend payments to estimate its value. Dividend models are not always accurate, but they can be useful in estimating the value of a company that pays a regular dividend.
Option D is incorrect because liquidation value is the value of a company’s assets if they were to be sold off. Liquidation value is often lower than book value, because it does not take into account the costs of selling the assets.