=+Firm A has a stock market value of 20m (number of shares in issue x share price),

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=+Firm A has a stock market value of £20m (number of shares in issue x share price), while firm B is valued at £15m. The firms have similar profit histories:

Firm A Firm B

2001 1.5 1.8 2002 1.6 1.0 2003 1.7 2.3 2004 1.8 1.5 2005 2.0 2.0

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