The ________ ratio has been used extensively in the valuation of bank stocks because bank assets often have similar book values and market values.
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A. B. C. D. E.A
The P/BV ratio has become important as a measure of relative value for stocks. The relationship between the market price of a stock and its book value per share can be used as a relative measure of valuation because, under theoretically ideal conditions, the market value of a firm should reflect its book value. However, particularly with industrial firms, an increase in the estimates of breakup value has caused the average P/BV ratio to experience a volatile increase over time.