PRICE-TO-BOOK RATIO (P/B RATIO)
Price-to-Book Ratio compares a company's market value to its book value, assessing whether a stock is over- or undervalued.
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Stock dilution refers to the decrease in the ownership percentage of existing shareholders due to the issuance of additional shares by the company. In trading, stock dilution can occur during secondary offerings, stock splits, or when stock-based compensation is issued. Traders often react negatively to stock dilution, as it can reduce earnings per share (EPS) and potentially lower the stock price. Monitoring dilution events helps traders assess the impact on stock value and adjust their strategies accordingly.