Form groups of three to six students each. Each student should pick two companies, preferably from different industries. Find the appropriate data and compute the market-to-book ratio and the ROE for each company.
Assemble the group and list the companies selected, together with their market-to-book ratio and ROE. Rank the companies from highest to lowest on market-to-book ratio. Then rank them on ROE.
Explain why companies rank as they do in each list. Are the rankings similar; that is, is the ranking based on market-to-book similar to the ranking based on ROE? Explain why you would or would not expect similarity in the rankings.