The justified M/B ratio can be estimated by comparing with all of the following except:
A) comparisons with industry ratios.
B) comparisons with aggregate market ratios.
C) comparisons with past trends.
D) technical indicators in the DDM.

Question

Quizplus · Accepted Answer

The justified market-to-book (M/B) ratio is typically estimated by comparing it with industry ratios, aggregate market ratios, and past trends. Technical indicators in the Dividend Discount Model (DDM) are not used for estimating justified M/B ratios, as they are more relevant for stock price forecasting and trend analysis rather than for assessing the intrinsic value reflected by M/B ratios.

The Justified M/B Ratio Can Be Estimated by Comparing with All