Question
You are asked to value Bank A using price to book ratio. Bank A is a privately-owned bank and is planning for public offering. Assume
You are asked to value Bank A using price to book ratio. Bank A is a privately-owned bank and is planning for public offering. Assume the following information:
|
| Bank A | Average banking industry |
| Price to Book ratio | NA | 1.8 |
| Return on equity | 13% | 11.5% |
| Expected growth rate | 4% | 4% |
If the average bank is fairly priced, given its fundamentals, and Bank A has a net income of $150 million this year.
Bank A's Price to book ratio is?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Contemporary Business Mathematics with Canadian Applications
Authors: S. A. Hummelbrunner, Kelly Halliday, Ali R. Hassanlou, K. Suzanne Coombs
11th edition
134141083, 978-0134141084
