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price to book ratio definition and how to calculate

price to book ratio definition and how to calculate

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Answer #1

Price to book ratio can be defined as "The price-to-book ratio, or P/B ratio, is a financial ratio used to compare a company's current market price to its book value."

here is how to calculate P/B ratio

1. calculate book value of the company

2. Find out Book value per share

3. Finally, divide the company's current stock price by the book value per share to find out price to book

And the answer is price to book ratio

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