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Vinnie's Motors Has a Market-To-Book Ratio of 3

Question 47

Multiple Choice

Vinnie's Motors has a market-to-book ratio of 3.4.The book value per share is $34 and earnings per share are $1.36.Holding the market-to-book ratio and earnings per share constant,a $1 increase in the book value per share will:


A) decrease the price-earnings ratio.
B) decrease the EV multiple.
C) decrease the market price per share.
D) increase the price-earnings ratio.
E) increase the return on equity.

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