BlackRock Corporate High Yield Fund, Inc
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The price-to-tangible-book ratio, or P/B ratio, can be calculated as follows:
Price to Tangible Book = Share Price / Tangible Book Value per Share
It can also be calculated from the numbers for the whole company:
Price to Tangible Book = Market Cap / Tangible Equity
A closely related ratio is called P/B Ratio
. The difference between Price-to-Tangible-Book Ratio and P/B Ratio
is that book value other than intangibles are used in the calculation.
Price to Tangible Book = Market Cap
/ Tangible Equity
Some businesses have very light assets, such as software companies or insurance agencies. The Price-to-Book Ratio does not work well for these companies. Some companies even have negative equity, so the Price-to-Book Ratio cannot be applied to them.