I'd like to discuss and learn what you think about one of the controversial issues in finance, both in corporate finance and asset pricing camps. That is about market-to-book ratio and its relation with the stock returns. My personal research agenda is also closely related to this field. For example, one camp argues that a high market to book ratio suggests the existence of valuable future growth options of that company. On the other hand, others argue that a high market to book ratio suggests the overvaluation and therefore future collapse of stock prices. I don't take a side.

I want you to think about these two sides, make a google search. It is beyond the exam coverage but it is definitely going to contribute to our understanding of the difference between book values and what is going in the real world (e.g., stock market).