- CFA Exams
- CFA Level I Exam
- Topic 5. Equity Valuation
- Learning Module 23. Market-Based Valuation: Price and Enterprise Value Multiples
- Subject 5. Price to Book Value
CFA Practice Question
The book value, the denominator in P/B, is calculated as ______ divided by the number of shares outstanding.
B. total assets - total liabilities.
C. common shareholders' equity.
A. total assets.
B. total assets - total liabilities.
C. common shareholders' equity.
Correct Answer: C
It does not include preferred shareholders' equity.
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