If a company has a price-to-book ratio that is less than one, this implies that future expected return on equity is less than required return on equity.

Question

Quizplus · Accepted Answer

A price-to-book ratio less than one suggests that the market values the company's equity at less than its book value, indicating that investors expect the company's future return on equity to be less than the required return.

If a Company Has a Price-To-Book Ratio That Is Less