What circumstances would market to book value ratios, Financial Management

Assignment Help:

Under what circumstances would market to book value ratios be misleading?  Explain.

The Market to Book ratio is helpful, however it is only a irregular approximation of how liquidation and going concern values compare. This is for the reason that the Market to Book ratio uses accounting-based book values.  The definite liquidation value of a firm is probable to be different than the book value.  For example, the assets of a firm perhaps worth more or less than the value at which they are currently carried on the company's balance sheet.  Additionally, the current market price of the company's preferred stock and bonds may as well differ from the accounting value of these claims.

 


Related Discussions:- What circumstances would market to book value ratios

Bond-equivalent yield, Normally, the cash flows from mortgage backed ...

Normally, the cash flows from mortgage backed and assets-backed securities are obtained on monthly basis. Therefore, the yield calculated would be on a monthly ba

Please help me solve this question, there are 3 compaies i have to find out...

there are 3 compaies i have to find out the price of equity share by using walters and gordons model.

Pvif, how do we get the pvif of a perpetuity

how do we get the pvif of a perpetuity

Financial decision, Should a company pursue price hike or focus on increasi...

Should a company pursue price hike or focus on increasing sales volume

Demand at each particular exchange rate, The usual number of passengers usi...

The usual number of passengers using the service is dependent upon the demand at each particular exchange rate. At 1·52 Euro/£ expected demand = (0·33·)(500 + 460 + 420) = 460

Hedging strategy, Crown Co. is expecting to receive 100,000 British pounds ...

Crown Co. is expecting to receive 100,000 British pounds in one year. Crown expects the spot rate of British pound to be $1.49 in a year, so it decides to avoid exchange rate risk

Define capital rationing, What is capital rationing?  Should a firm practic...

What is capital rationing?  Should a firm practice capital rationing?  Why? The term Capital rationing is the practice of setting dollar limits on what will be invested in new ca

Benefits of conducting a cost and benefit analysis, Question 1: i) What...

Question 1: i) What is meant by Cost and Benefit Analysis? Illustrate your answer with the use of empirical and hypothetical examples. ii) What are the benefits of conductin

Break even period, Break Even Period: It is also important to compare t...

Break Even Period: It is also important to compare the returns from the equity stock and the bond to determine the profitability of both investments. Assume that the dividend p

Time value of money, In order to provide for R10 million to build a new war...

In order to provide for R10 million to build a new warehouse in 5 years time, a company plans to make equal payments at the end of each six months into a fund which earns 9% per ye

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd