Then my equity would go negative again.

What if there's actually negative equity here?

The market value equity of 1.5 billion.

So notice, I now have negative equity, right?

It might have to then realize negative equity.

So the asset value is all in equity.

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

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

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

liabilities, which means that its equity is actually worth negative.

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.

Because the book value of its equity is 5 million.

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

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

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

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

I'm going to get the same function value at the negative value.

So if this is worth zero, then I actually have negative equity.

I can get to any negative value if I make x negative enough.

Absolute value of negative 3 is positive 3.

Absolute value of negative 3 is positive 3.

But then take the negative value of it.

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

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.

Since there's 5 times the absolute value of negative 2 minus 3, the absolute value of negative 2 is positive 2.

Absolute value of negative 8 is 8 and absolute value of 8 is 8.

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

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.

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.

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.

Or by invoking square root with a negative value?

But then for negative values, the absolute value of x is equal to negative x.

If the step is negative, the start value must be greater then the end value.

So its x value is going to be negative 4.

Because negative 2 has an absolute value less than 3.

We have a negative x value, our x value is negative, so we're gonna move to the left, we're gonna be on this side.

CDOs that they have on their balance sheets is the larger than their equity value.

Notice, the book value of my equity, well it might have changed a little bit.

And now the book value of our equity is now going to be 2 billion.

If pixels are negative, we just ignore the negative sign and map back to the absolute value.

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

Returns a positive value if a b, zero if a b and negative value if a b.