The Price-Book Ratio Is Computed as the Market Value Per

question 17

Multiple Choice

The price-book ratio is computed as the market value per share divided by the per share book value of:

• A)total assets.
• B)long-term debt.
• C)equity.
• D)long-term debt plus equity.
• E)net working capital.

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Definitions:

Unlimited Liability

A legal obligation where a business owner or investor is personally responsible for all the debts of the business, without any limit on the amount they can be required to pay.

Investor

An individual or organization that allocates capital with the expectation of earning a financial return.

Corporation

A legal entity that is separate from its owners, providing them with limited liability, and recognized as a person under law that can enter into contracts, own assets, and be sued.

Partner's Liability

The legal responsibility of a partner in a partnership for the debts and obligations of the partnership.