var Categories = repository.Categories.Select(c => new System.Web.WebPages.Html.SelectListItem { Value = c.CategoryId.ToString(), Text = c.Name });
SelectList list = new SelectList(Categories, "Value", "Text");
ViewBag.Categories = list;

public class Book
    {
            public int BookId { get; set; }
            public Category Category { get; set; }
    }
public class BooksController : Controller
{
	private Repository context = new Repository(); 
	public ActionResult Index()
	{
		//Код для вывода списка книг
	}
	
	public ActionResult Edit(int Id)
	{
		Book book = context.Books.FirstOrDefault(g => g.BookId == Id);
		ViewBag.Categories = new SelectList(context.Categories, "Id", "Name", book.CategoryId);
		return View(book)
	}
	
	[HttpPost]
	public ActionResult Edit(Book Book)
	{
		if (ModelState.IsValid)
		{
			//здесь делаем то что надо 
		}
		ViewBag.Categories = new SelectList(context.Categories, "Id", "Name", book.CategoryId);		
	}
}