Market Ratios (P/E, P/B, Dividend Yield)

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What it means

Valuation multiples relating price to earnings, book value, and dividends.

Why it matters

How the market prices the business relative to fundamentals.

How to calculate — with Cawan's Shoes

P/E = Price / EPS. P/B = Price / Book Value per share. Yield = Dividend / Price. Cawan's: $50 / $3 = 16.7 P/E.

What's at stake if you ignore this

Bad multiples raise cost of equity and hurt M&A currency.