The book-to-market effect implies that shares of companies with _____ ratios tend to _____ the market.
a) low book-to-market; outperform
b) high P/E; underperform
c) high book-to-market; outperform
d) high P/E; outperform
e) high book-to-market; underperform
The book-to-market effect implies that shares of companies with high book-to-market ratios tend to outperform the market.
Option c is correct.
Companies with high book-to-market ratios are considered cheap relative the price of the stock and hence they tend to outperform the market.
The book-to-market effect implies that shares of companies with _____ ratios tend to _____ the market....
5. Market value ratiosRatios are mostly calculated using data drawn from the financial statements of a firm. However, another group of ratios, called market value ratios, relate to a firm’s observable market value, stock prices, and book values, integrating information from both the market and the firm’s financial statements.Consider the case of Cold Goose Metal Works Inc.:Cold Goose Metal Works Inc. just reported earnings after tax (also called net income) of $8,000,000 and a current stock price of $14.75 per share....
Market value ratios Ratios are mostly calculated using data drawn from the financial statements of a firm. However, another group of ratios, called market value ratios, relate to a firm’s observable market value, stock prices, and book values, integrating information from both the market and the firm’s financial statements. Consider the case of Green Caterpillar Garden Supplies Inc.: Green Caterpillar Garden Supplies Inc. just reported earnings after tax (also called net income) of $9,250,000 and a current stock price of...
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Assignment 04 - Analysis of Financial Statements 6. Market value ratios Aa Aa Ratios are mostly calculated using data drawn from the financial statements of a firm. However, another group of ratios, called market-based ratios, relate to a firm's observable market value, stock prices, and book values, integrating information from both the market and the firm's financial statements. Consider the case of Green Caterpillar Garden Supplies Inc.: Green Caterpillar Garden Supplies Inc. just reported earnings after tax (also called net...
Ratios are mostly calculated using data drawn from the financial statements of a firm. However, another group of ratios, called market value ratios, relate to a firm’s observable market value, stock prices, and book values, integrating information from both the market and the firm’s financial statements. Consider the case of Green Caterpillar Garden Supplies Inc.: Green Caterpillar Garden Supplies Inc. just reported earnings after tax (also called net income) of $9,250,000 and a current stock price of $12.00 per share....
Ratios are mostly calculated using data drawn from the financial statements of a firm. However, another group of ratios, called market-based ratios, relate to a firm's observable market value, stock prices, and book values integrating information from both the market and the firm's financial statements. Consider the case of Green Caterpillar Garden Supplies Inc.: Green Caterpillar Garden Supplies Inc. just reported earnings after tax (also called net income) of $95,000,000, and a current stock price of $17.50 per share. The...
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