Under what circumstances would a company’s stock trade for less than the book value of its equity?

Choose a company not mentioned in this week’s lectures and use the Mauboussin & Bartholdson approach to provide a brief analysis of the strengths (or weakness) of the company’s competitive moat. You need only provide one or two sentences to address characteristics that Mauboussin & Bartholdson highlight.

Discussion

Review this week’s reading from Tsang & Xydias: “Cheapest Stocks Since 1995 Show Cash Exceeds Market (Update5).”

Under what circumstances would a company’s stock trade for less than the book value of its equity?

When you consider how bonds are valued, what is the greatest risk in the use of bonds?