Vidyalelo
Commerce · Q737

Financial Management

Graduate and Post Graduate · Commerce · question 737

Q737

Stock issued by company have lower rate of return because of

A.
high market to book ratio
B.
low book to market ratio
Answer
C.
low market to book ratio
D.
high book to market ratio

Answer: Option B

Solution

Answer: Option B
Solution:
Stock issued by company have lower rate of return because of low book to market ratio. The book-to-market ratio is used to find a company's value by comparing its book value to its market value.