Price-to-book ratio (P/B)

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The price-to-book (P/B) ratio is a simple way of gauging whether a company's shares are underpriced or overpriced.

It is calculated by dividing the current closing price of a company's share by its book value per share in the latest quarter.

Watch this video to learn what the P/B ratio is and how to use it in your stock trading strategies.

For more in-depth information, read the lesson the video is based on:

Lesson
Learn how the price to book ratio is used to gauge whether a company's shares are under or overpriced.
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