Finance School of management Market value book value You buy a house for ABC Realty Balance Sheet S100.000 on january 1 January 1, 19XO 19X0 and rent it out to Assets make a profit Land 25,000 Build 75000 You finance the purchase Liabilities with $20, 000 of your own Mortagage loan 80.000 money(equity financing Ownerd Equity(Net Worth)20,000 and an $80,000 mortgage loan from a bank(debt ABC Realty market-Value Balance sheet financing) January 2, 19X0 . On January 2, someone Assets makes you a bona fide Land building $150.000 offer of s150,000, which liabilities is the market value Mortagage Loan 80000 Oner口 equity△ Net Worth) 70,000 uesTc5 Finance School of Management Market Value & Book Value ❖ You buy a house for $100,000 on January 1, 19X0 and rent it out to make a profit. ❖ You finance the purchase with $20,000 of your own money (equity financing) and an $80,000 mortgage loan from a bank (debt financing). ❖ On January 2, someone makes you a bona fide offer of $150,000, which is the market value. Assets Land $25,000 Building 75,000 Liabilities Mortagage Loan 80,000 Owner抯 Equity (Net Worth) 20,000 ABC Realty Balance Sheet January 1, 19X0 Assets Land & Building $150,000 Liabilities Mortagage Loan 80,000 Owner抯 Equity (Net Worth) 70,000 ABC Realty Market-Value Balance Sheet January 2, 19X0