Chang, Inc.'s balance sheet shows astockholders' equity-book value(total commonequity) of $759,900. Thefirm's earnings per share is $3.05, resulting in aprice/earnings ratio of 12.04x. There are 52,000 shares of common stock outstanding. What is theprice/book ratio? What does this indicate about how shareholders viewChang, Inc.?

a) Theprice/book ratio is ______________ (round to two decimal places)

b) "The price/book ratio indicates that the shareholders believe that thecompany's shares are worth more than twice their historical cost value on the balancesheet."

Is the above statement true orfalse?