3. Comment on the factors affecting the estimate of ratio of enterprise value to book value of net operating assets. Do you expect the ratio of enterprise value to book value based on the firms share price to be close to your estimate of this ratio?

Answer tips: The drivers of enterprise price to book identified in the ReOIM (growth and excess profitability) should be discussed. Issue of market efficiency in relation to expectations used to set stock prices should be considered in the second part of the question.