Final answer:
The correct answer to the question is B. greater than zero. Market capitalization being less than goodwill suggests the market values the company less than the value of goodwill alone, but does not imply other assets are of negative value.
Step-by-step explanation:
If market capitalization is less than the reported goodwill, and assuming all other asset values equal something, the other component must be greater than zero. Market capitalization reflects the total value of a company's shares of stock, indicating what the market believes the company is worth as a whole. Goodwill, on the other hand, is an intangible asset that can occur when a company acquires another company at a price higher than the fair market value of its net assets.
Thus, in accounting terms, if the market capitalization is less than the reported goodwill, it suggests that the market is valuing the company's total equity at less than just one component (goodwill) of its assets. This could imply that investors have a pessimistic view of the company's other assets or future profitability. However, the calculation of equity (market capitalization) is distinct from the balance sheet, and thus the market capitalization can be less than goodwill without implying a negative value for other assets.
The correct answer to the question is B. greater than zero because a company's total assets, including goodwill, are likely to be greater than its market capitalization if only goodwill is higher, and this does not necessarily mean that other assets have a negative value.