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Price to book value (market cap/Book value) is actually a metric of: PE x ROE which is equal to : (price/earnings) x (earnings / equity) where equity = net book value (asset-libailbities) therefore another way to write this is: (ROE – g) / (r – g) where g is the growth rate and r is the cost of equity/required rate of return. If we assume a zero ...

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