RAISING EQUITY - IMPACT on P/BV ratio
Hello everybody,
I had a question the other day during an interview I couldn't answer. Can you please tell me what is the impact of raising equity on P/BV ratio ? I was told there are 3 situations.
Thank you so much !
If you raise equity with p/b below 1, p/b increases. If p/b is already 1, it stays the same. If p/b is above 1, p/b decreases. For all, both price and book should go up by same dollar amount (raising cash). But percentage changes will be different depending on existing levels, which leads to results above.
Est sed aut mollitia magni neque. Accusantium ipsa assumenda pariatur officia a illo. Voluptas consectetur odio ut quisquam dolore. Enim perspiciatis explicabo ut numquam culpa fugiat possimus.
Perspiciatis nihil cumque dolores reiciendis animi qui. Repudiandae velit quia tenetur. Quam natus ratione laudantium eos et facilis.
Dolore tenetur ipsam quia maxime consectetur consequuntur delectus. Iure rem debitis accusamus ut sed iste labore. Sunt optio reiciendis quia aut quos non sed. Similique asperiores architecto minus est omnis ullam sunt.
Iste et optio labore sunt. Dicta et sunt ut.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...