Hard Qs
1 cardby @nagong1
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How does the Price-to-Book ratio change when dividends are issued?
Depends on if the P/B ratio is greater, equal or less than 1. Price = Equity Value, Book = Net Assets, so obviously when dividends are issued both are reduced & depends on the % change in both. So, if P/B >1, then the % change in P is less than B since both are reduced by the same $ amount (so increases). If <1, the inverse happens (so decrease). If =1, it remains the same.
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