Price-To-Book Value Ratio Cannot Be Used to Estimate the Value

question 51

True/False

Price-to-book value ratio cannot be used to estimate the value of firms with negative earnings or negative cash flows.

---

Definitions:

Specific Tax

A fixed amount taxed per unit of a good or service, as opposed to a percentage of the price.

Fraction

A numerical quantity that is not a whole number, represents a part of a whole, typically written with a numerator and a denominator separated by a slash.

Consumers

Individuals or households that use goods and services generated within the economy.

Import Quota

A restriction set by the government on the amount or cost of products allowed to be brought into a country from abroad.