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Hard Qs

1 cards · 4 key points · by @nagong1

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  1. How does the Price-to-Book ratio change when dividends are issued?

    • ☐Issuing dividends reduces both Price (Equity Value) and Book Value (Net Assets) by the exact same dollar amount.key
    • ☐If P/B is greater than 1, issuing dividends increases the P/B ratio because Book Value decreases by a larger percentage than Price.key
    • ☐If P/B is less than 1, issuing dividends decreases the P/B ratio.key
    • ☐If P/B equals 1, issuing dividends leaves the P/B ratio unchanged.