Which Statement Is True in Relation to the Book-To-Market Ratio

question 34

Multiple Choice

Which statement is true in relation to the book-to-market ratio:

• A) value shares have a low book to market ratio
• B) a book-to-market ratio of (1) would mean that the book value in the balance sheet equals the current market value
• C) the calculation is the number of shares multiplied by the market value of equity divided by 100
• D) if the book value in the balance sheet equals the current market value then this would be known as a company of growth shares.

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Definitions:

Corporations

Legal entities formed through a state charter, allowing owners to operate a business while being protected from personal liability beyond their investment.

Amended Returns

The process of revising previously submitted tax returns to correct any errors or include new information.

Loss

The result when an entity's expenses exceed its revenues, leading to a negative net income or deficit in its financial results.

Tax Liability

The amount of tax owed to the government by an individual, corporation, or other entity in a specific period.