The price-to-book ratio of a company can be shown to be a function of future expected return on common stockholders' equity and risk of equity capital.

Question

Quizplus · Accepted Answer

This is a true statement because the price-to-book ratio, which evaluates a company's market value in relation to its book value, is influenced by factors such as future expected profitability and the associated risk of the company's equity capital.

The Price-To-Book Ratio of a Company Can Be Shown to Be