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Business, 12.05.2020 18:57 alexandergoetz8239

Determining PB Ratio for Companies with Different Returns Assume that the present value of expected ROPI follows a perpetuity with growth g (Value = Amount/ [r - g]). Determine the theoretically correct PB ratio for each of the following companies A and B. Company Net Operating Assets Equity RNOA ROE Weighted Avg. Cost of Capital Growth Rate in ROPI A $100 $100 21% 21% 10% 2% B $100 $100 14% 14% 10% 2% Round answers to two decimal places. PB Ratio Company A Answer 10 Company B Answer 0

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