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.
Aut tempora numquam corrupti itaque enim dolores quisquam. Alias perspiciatis nulla laboriosam quam quis. Et sequi amet est ipsum aliquid. Consequatur ut dolore aliquid error. Sequi aspernatur deleniti pariatur et.
Ut sint sed sint a natus aut. Doloribus nihil perferendis et iure quasi. Eaque tempora iure nobis. Non in magnam numquam voluptas ullam.
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...