Often a corporation's most valuable assets were not purchased and, therefore, will not be reported as assets and will not be included in the corporation's book value. Think of the late Steve Jobs and the culture he developed at Apple. He and his team, the innovative culture, the wildly successful brand names, etc. could never be listed on the balance sheet as assets nor directly included in the corporation's book value.
On the other hand, the market does recognize those attributes as being immensely valuable. Hence the corporation's market value was and is greater than its book value.
Learn Accounting: Gain unlimited access to our seminar videos, flashcards, visual tutorials, exams, business forms, and more when you upgrade to PRO.