The market-to-book ratio is measured as:
A) Total equity divided by total assets.
B) Net income times market price per share of stock.
C) Net income divided by market price per share of stock.
D) Market price per share of stock divided by earnings per share.
E) Market value of equity per share divided by book value of equity per share.

Question

Quizplus · Accepted Answer

The market-to-book ratio compares the market value of equity per share to the book value of equity per share. Therefore, option E is the correct answer. Option A is calculating the equity multiplier, option B is calculating the market capitalization, option C is calculating the price-to-earnings ratio, and option D is calculating the price-earnings ratio.

The Market-To-Book Ratio Is Measured As