The market value equity of 1.5 billion.

This is 120,000 in equity, market value of equity, he has another 105,000 in liabilites.

And then, that gets you to the market value the equity.

And this is the market value of the equity, what the market thinks the equity's worth.

They just look purely at the equity value or the market capitalization.

We're willing to say that the market value of your equity is 210,000.

I think that's what I wanted a write here, market value of equity.

By applying the same price to earnings, we're saying that the market value of this equity is 210,000, while the market value of this equity is what was it? 189,000.

So the market cap, or what the market perceives the value of this equity is, the market capitalization, is these two numbers.

So let's call that market equity.

But when the market value, or the market cap, is below the book equity, that's the market just saying, hey we're calling your bluff.

So they're saying essentially that the market cap, and that's equivalent to the market value of the equity, or what the market thinks the equity is worth, that's 1 times 500 million shares.

In the last several videos we talked about the difference between the book value and the market value of a company's equity.

So, remember, assets are equal to liabilites plus shareholder's equity, so if all of a sudden the market value of the equity, the market capitalization, for Ben's shoe company is 215,000... (That is the equity part right over here)

Essentially when the market price of my asset dropped, all of that value came out of my equity.

You get a 189,000 market cap for this equity.

And 3.00 per share times half a billion shares, that's a 1.5 billion dollar market value of its equity.

So the asset value is all in equity.

It's the market's value of the owner's equity

Remember, there's a difference between book value and market value.

So the question is what makes up the gap here? when we think about the market value of the equity.

The market value could be very different.

You have 189,000 as the value of this equity.

There's two notions, there's your book value of equity, and that's the value of the equity that comes out of your balance sheet.

So it really depends on the market value.

Because the book value of its equity is 5 million.

And it's essentially, what is the market saying the equity is worth?

And the denominator here is the equity, the book value of our equity, so that's 5 million.

Ben has actually done a good job of saying the market value of his inventory, the market value of his equipment.

Then the number that pops out on the equity side, that is a book value of your equity.

So the shareholders' equity, or you could almost say the book value of the equity of the company, is 5 million. 5 million equity.

Or another way of viewing it, is that this is the market's guess, or you could call it the market value of the equity.

But this is the market value of the assets.

That would have been the market value per share.

It's market value. Just like in a sushi shop.

So the market is actually saying, no, you don't have 2 billion of equity, you only have half a billion of equity.

The market value tends to be the best representation of the true value of something.

So the market is valuing their equity plus liabilities at 100 and... or 225,000.

This is the market's guess of the value of this company's equity.

In our case, the book value of the equity was 5 million.

Ethiopia's domestic market is about one billion dollars of value.

But the market value or assets is essentially, what is the market saying the assets are worth?

Equity is what's left over. So let's say this is all book value.

And book equity per share, or the book value per share of 6.00.

So that's why the book value of the equity is now 2 billion.