n NISM Certifications
XV NISM Series XV
Medium

A company has a Book Value per Share of Rs. 18, a Market Capitalization of Rs. 50 lakhs, and Net Worth of Rs. 10 lakhs. Calculate the Price-to-Book Value ratio.

Practice question from NISM XV Mock Test 7 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    2.78

  2. B

    10

  3. 5

    Correct answer

  4. D

    12

Why this is the answer

P/B Ratio = Market Capitalization / Net Worth = 50,00,000 / 10,00,000 = 5. This shows investors pay 5 times the book value per share. Other options are incorrect calculations.

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