Price to Book ratio

Is this supposed to be a question? Because if it is then I have no idea what you are wanting!!

It's a question, for Price to Book value? Sorry! Missed to write it. I tried but couldn't solve it.

The provided answers are 1) 5.91 2) 0.50 3) 2.38 4) 0.83

I am puzzled where you found this question, because price to book value is a US term which is not asked in Paper FM (if it ever was then it would be defined for you in the question). I assume that you are using a Revision Kit from one of the ACCA Approved Publishers. If this question is in the BPP Revision Kit then please tell me the number of the question because I am very surprised that they should have included it. Also, I am surprised that whatever book you are using that it does not provide the answer and workings :-) Using CAPM, the shareholders required rate of return = 6 + (0.8 x 4) = 9.2% Therefore, using the dividend valuation formula, the MV = (6 x 1.06) / (0.092 - 0.06) = 198.75 The nominal value of the shares is (11.04 x 1.06) / 0.14 = 83.59 So the MV / nominal value = 198.75 / 83.59 = 2.38

"The nominal value of the shares is (11.04 x 1.06) / 0.14 = 83.59" Sir am curious to know which is this formula that you used to find nominal value per share?

I divided next years earnings by the return on equity - it is a 'formula' from Paper FA :-) However, again, this is not something that is asked for in ACCA exams.