NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Investing in Stocks (NISM XXI-A)
A company with 10 crore shares outstanding has a market price of ₹120 per share. Its net worth is ₹600 crore. What is its price-to-book value (P/B) ratio?
The P/B ratio is 2. Net worth of ₹600 crore over 10 crore shares gives book value of ₹60 per share, and the market price of ₹120 is twice that figure.
- A0.5
- B2Correct
- C5
- D20
Explanation
Book value per share = 600 crore / 10 crore = ₹60. P/B = 120 / 60 = 2. Option 0.5 inverts the ratio; 20 wrongly uses market cap divided by shares count without conversion.
Did you get it right without looking?
One question tells you little. A timed set on Investing in Stocks (NISM XXI-A) shows your real accuracy, how long you take and where you lose marks.
More Investing in Stocks (NISM XXI-A) questions
- A company declares a bonus issue of 1 share for every 2 held. A share closed at ₹450 just before the ex-bonus date. Ignoring other factors, …
- A stock trades at Rs 600 and its earnings per share for the last twelve months are Rs 30. What is its trailing price-to-earnings (P/E) ratio…
- A company announces a bonus issue of 1 share for every 4 shares held. An investor holds 200 shares. How many shares will the investor hold a…
- A stock is bought at Rs 250. During the year it pays a dividend of Rs 5 per share and the price at year end is Rs 280. What is the total hol…
- In the context of equity shares, what does the term 'face value' of a share represent?
- A stock bought at Rs 800 pays a dividend of Rs 24 during the year and is sold at Rs 872 at year end. What is the total return for the year?