The Present Chapter
This chapter discusses the concept of market–valuation ratios.
Every company strives to maximize the shareholders’ value. The shareholders’ value is directly linked to the market performance of a company. This becomes all the more important for publicly held company. The concept of “market performance” would be applicable for a listed company, wherein, retail shareholders’ sentiments are involved.
Book value per share: It is a measure used by owners of common shares in a firm to determine the level of safety associated with each individual share after all debts are paid accordingly. It is defined as follows:
If the company decides to dissolve, the book value per equity ...