Calculate the "market-to-book" ratio and use your knowledge about the residual income valuation model to explain what this ratio tells you about the market's expectations of the company's future return on equity (ROE).
a. Market-to-book ratio = Market Value of Equity / Common Shareholder's Equity
b. Market-to-book ratio = Common Shareholder's Equity / Market Value of Equity
c. Market-to-book ratio = Stock price / BV Common Shareholder's Equity
d. Market-to-book ratio = Shares Outstanding / Stock price
e. Market-to-book ratio = BV Common Shareholder's Equity / Stock price