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  3. 6. corporation a traded at a p/b (price-to-book) r

6. Corporation A traded at a P/B (price-to-book) ratio of 0.5. Its most recent reported...

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Finance

6. Corporation A traded at a P/B (price-to-book) ratio of 0.5. Its most recent reported ROCE is 10% and its cost of equity is also about 10%. Which of the following is most likely to be true?

A. On average, the market expects future ROCEs to increase to above 10%;

B. On average, the market expects future ROCEs to decrease to below 10%;

C. On average, the market expects future ROCEs to maintain at 10%;

D On average, the market does not know what to expect.

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