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Questions and Answers
What does a market-to-book (M/B) ratio evaluate?
What does a market-to-book (M/B) ratio evaluate?
- The company's revenue and expenses
- The company's customer satisfaction
- The company's employee turnover rate
- The relationship between market value and book value (correct)
What type of stocks have high market-to-book (M/B) ratios?
What type of stocks have high market-to-book (M/B) ratios?
- Dividend stocks
- Cyclical stocks
- Growth stocks (correct)
- Value stocks
What is the M/B ratio for successful firms, according to the text?
What is the M/B ratio for successful firms, according to the text?
- Equal to the book value
- Equal to the market value
- Greater than one (correct)
- Less than one
