What would you look for to justify a price/book value ratio of 3.0? What would you expect to be the characteristics of a firm with a P/BV ratio of 0.6?
Answer to relevant QuestionsWhy has the price/cash flow ratio become a popular measure of relative value during the recent past? What factors would help explain a difference in this ratio for two firms?Discuss the two factors that determine the franchise value of a firm. Assuming a firm has a base cost of equity of 11 percent and does not have a franchise value, what will be its P/E?On your visit to Alessandra Chemical Corp. (ACC), you learned that the board of directors has periodically debated the company's dividend-payout policy.a. Briefly discuss two arguments for and two arguments against a high ...Your client is considering the purchase of $100,000 in common stock, which pays no dividends and will appreciate in market value by 10 percent per year. At the same time, the client is considering an opportunity to invest ...Assume a significant decline in credit balances at brokerage firms. Discuss why a technician would consider this bullish or bearish.
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