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book value formula average. This rate is kind of deadline whether this project produces net income or net loss. For decide to these projects value it needs cutoff rate.
Justified Market Multiples Valuation Is The Price Right from einvestingforbeginners.com
Company X has a PB lower than the industry average and lower than its peer group which highlights that X might be undervalued. For decide to these projects value it needs cutoff rate. This can be summarized into the following formula.
Sample Calculation of Net Book Value Lets put in the example of the logging truck mentioned above.
So if the company has 10000000 in stockholders equity and 1000000 shares of stock outstanding the book value of each share is 100000001000000 or 10. For decide to these projects value it needs cutoff rate. The formula for price to book value is the stock price per share divided by the book value per share. Average net income divided by Average book value.
