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Set 03 A firm has a price-to-book ratio of 0.7 and an analyst forecasts future ROCE of 12%. The firm has a cost of capital

Set 03
  1. A firm has a price-to-book ratio of 0.7 and an analyst forecasts future ROCE of 12%. The firm has a cost of capital of 10%. The analyst recommends investors HOLD the stock. Does this recommendation agree with the ROCE forecast? Explain.

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