Chapter 10

Concept of Market Ratios

The Present Chapter

This chapter discusses the concept of market–valuation ratios.

Market Performance

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.

  1. 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 ...

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