Why should I choose AnalystNotes?

Simply put: AnalystNotes offers the best value and the best product available to help you pass your exams.

Find out more

Basic Question 0 of 4

The P/B multiple of a service company is usually ______ than that of a heavy equipment manufacturer.

A. higher.
B. lower.
C. the same as.
Check Answer Next Q Print

User Contributed Comments 4

User Comment
katybo and the price?
danlan2 Price of a service company is similar to that of a heavy equipment manufacturer.
Rchan89 i think all else equal, a service company has less fixed assets they need to purchase than an auto manufacturer.
davidt876 i dont think it makes sense to comment on the price or book value in isolation. you can justify that the ratio of P/B is higher in the service industry than in manufacturing, but you can't say that P or B are absolutely higher or lower in any industry. even if you found that average book value is higher in an industry, its most likely a function of consolidation or the long-term lifecycle of the industry
You need to log in first to add your comment.
You have a wonderful website and definitely should take some credit for your members' outstanding grades.
Colin Sampaleanu

Colin Sampaleanu

Learning Outcome Statements

explain principles and approaches to forecasting a company's financial results and position

CFA® 2025 Level I Curriculum, Volume 3, Module 7.