Register
A firm's market-to-book ratio might be greater than 1.0 due to accounting reasons. An example of an accounting reason that would cause the market-to-book ratio to increase is
170,326 views
22 votes
22 votes
A firm's market-to-book ratio might be greater than 1.0 due to accounting reasons. An example of an accounting reason that would cause the market-to-book ratio to increase is

User Amadib
by
3.0k points

1 Answer

19 votes
19 votes

Answer: off-balance-sheet assets arising from investments in successful research and development programs that are expensed according to conservative accounting principles.

Step-by-step explanation:

The market to book ratio refers to the financial valuation metric that is used in the evaluation of the current market value of a company relative to the book value of the company.

It should be noted that there'll be an increase in the market price of a company when there are investments which are made by the company in successful research and development programs which entails the use of the conservative accounting principles.

User Pugmarx
by
2.7k points
Ask a Question
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

1.6m questions

2.0m answers

Other Questions

If the rate of inflation in Japan dramatically increases while the rate of inflation in the United States remains constant, then a. the demand curve for dollars shifts to the left. b. the demand curve
If you buy a one-year bond for $4,000 and the issuer pays you back $5,000 at the end of one year, the interest rate on the bond is
Kylie is risk averse and has $1,000 with which to make a financial investment. She has three options. Option A is a risk-free government bond that pays 5 percent interest each year for two years. Option
Elroy Rocket is entering his senior year as an accounting major and has a number of options for his summer break. His options for the 3 month break follow: (1) Work full time at a local accounting firm
In January of the current year, Dora made a gift of stock to her granddaughter. At the time of the gift, the stock was worth $15,000. Several months later in the same year after the gift, a $500 dividend
Link Copied!