Financial Ratios and Market-to-Book Ratio Quiz
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Questions and Answers

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?

  • Dividend stocks
  • Cyclical stocks
  • Growth stocks (correct)
  • Value stocks

    • 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

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