Statements concerning price to book value is true

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1. Which of the following statements concerning price to book value is true?

There is an inverse relationship between price to book values and market prices

It is calculated as the ratio of price to the book value of assets

There is supporting evidence that stocks with low price to book values significantly outperform the market

Price to book value ratios for many stocks range from 5.5 to 10.5

2. Which of the following changes will likely lead to a higher P/E, assuming other factors are equal?

A decrease in the dividend pay-out ratio

An increase in growth rate of earnings

An increase in the required rate of return

A decrease in the dividend yield

Reference no: EM131866137

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