A Low Market-To-Book Ratio Could Indicate That a Stock Is

question 79

True/False

A low market-to-book ratio could indicate that a stock is undervalued.

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Definitions:

Par Value

A nominal value assigned to a share of stock in the charter of a corporation, which is the minimum legal capital per share.

Common Share

A unit of equity ownership in a corporation, granting holders voting rights and a share in the profits through dividends.

Noncumulative

A term often used in the context of preferred stock dividends that indicates dividends not paid in one period do not need to be paid in future periods.

Nonparticipating

Refers to an insurance policy, financial instrument, or other contracts that do not entitle the holder to share in the profits or surplus of the issuer.