6. Corporation A traded at a P/B (price-to-book) ratio of 0.5. Its most recent reported...
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6. Corporation A traded at a P/B (price-to-book) ratio of 0.5. Its most recent reported ROCE is 10% and its cost of equity is also about 10%. Which of the following is most likely to be true?
A. On average, the market expects future ROCEs to increase to above 10%;
B. On average, the market expects future ROCEs to decrease to below 10%;
C. On average, the market expects future ROCEs to maintain at 10%;
D On average, the market does not know what to expect.
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