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Fundas: Understanding the Price to Book (P/B) Ratio

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In this post lets try and understand the Price to Book ratio also commonly known as P/B ratio. What does it mean when companies trade at a P/B of 1, why do some companies trade at a premium or a discount to P/B ratio of 1. Why do we benchmark the premium or discount of the P/B ratio to 1. To find answers to all the above, read on . . .

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