Which of the following will affect observed price to book ratio
I. Expected ROCE
II. Business risk
III. Risk free rate of interest
IV. Expected growth

Question

Quizplus · Accepted Answer

All the factors listed can affect the observed price to book ratio. Expected ROCE and expected growth can influence future profitability and valuation, business risk can affect the perceived stability and riskiness of the company, and the risk-free rate of interest can impact discount rates used in valuation models.

Which of the Following Will Affect Observed Price to Book