Assume you are a research analyst and the portfolio manager that you report to suggests that you incorporate the following ratio in your analysis of the companies that you are assigned to follow. I Price -Book Value R & D Expense a This ratio is a modification of most relative valuation ratios in that the numerator is not simply price, but is the difference between price and book value. Engage in a conversation with your classmates about this ratio. Consider the following questions. What do you think this ratio is trying to measure? For which industry types would the ratio be most appropriately used? Why? For which industry types would the ratio be mostly inappropriate? Why? Does GAAP allow value created through R&D efforts to be included on the balance sheet? Do you have any concerns that you would want to share with the portfolio manager about using the above multiple in estimating the intrinsic value of the stock? Assume you are a research analyst and the portfolio manager that you report to suggests that you incorporate the following ratio in your analysis of the companies that you are assigned to follow. I Price -Book Value R & D Expense a This ratio is a modification of most relative valuation ratios in that the numerator is not simply price, but is the difference between price and book value. Engage in a conversation with your classmates about this ratio. Consider the following questions. What do you think this ratio is trying to measure? For which industry types would the ratio be most appropriately used? Why? For which industry types would the ratio be mostly inappropriate? Why? Does GAAP allow value created through R&D efforts to be included on the balance sheet? Do you have any concerns that you would want to share with the portfolio manager about using the above multiple in estimating the intrinsic value of the stock