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Book-to-Market Ratio
(redirected from Book-to-Market)

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Book-to-Market Ratio
A ratio of a publicly-traded company's book value to its market value. That is, the BTM is a comparison of a company's net asset value per share to its share price. This is a useful tool to help determine how the market prices a company relative to its actual worth. A ratio greater than one indicates an undervalued company, while a ratio less than one means a company is overvalued. Value managers seek out companies with high BTMs for their portfolios.
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In general institutional lenders perceive small and high book-to-market borrowers as systematically riskier than larger borrowers with low book-to-market ratios, consistent with the asset pricing approach in Fama and French (1993).
Evidence on the trade-off between risk and return for IPO and SEO ... by Brav, Alon; Michaely, Roni; Roberts, Michael; Zarutskie, Rebecca / Financial Management
stock market, the correlation is negative and large, and low-frequency shocks to volatility are highly persistent, the authors find, Lynch examines portfolio allocation across equity portfolios formed according to size, book-to-market value, and the like.
Asset Pricing by NBER Reporter
First, we assume that a firm's book-to-market ratio is a good proxy for the ratio of the value of assets-in-place to the total value of the firm.
Growth options, beta, and the cost of capital by Bernardo, Antonio E.; Chowdhry, Bhagwan; Goyal, Amit / Financial Management
 
 
 
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