Question #32
Reading: Reading 22 Market-Based Valuation - Price and Enterprise Value Multiples
PDF File: Reading 22 Market-Based Valuation - Price and Enterprise Value Multiples.pdf
Page: 11
Status: Correct
Correct Answer: B
Question
Enhanced Systems, Inc., has a price to book value (P/
Answer Choices:
A. sold or sold short as an overvalued stock
B. bought as an undervalued stock
C. viewed as a properly valued stock
Explanation
The price per dollar of book value is the same as that for the median of the peer group,
which implies that it is likely properly valued.