i’m confused by these two ratio since the formula seem to indicate they have different numerator §
P/B = (ROE - g) / (r - g) dervied from P/B = (D / (r-g)) / B
P/S = SM * (1 - b) × (1 + g) / (r-g) derived from P/S = (D (1 + g) / (r-g)) / B
Do these indicate D in the first equation is D_1 and D in the second equation is D_0?
If yes, these two would have same numerators. Then can we always use justified P/B to back out justified P/S by
justified PS = justified PB * B / S
In this case, there should have no difference when we use these two to evaulate a stock vs market price since the implied P are same. It is difference only when we use them to compare with industry avg or other company.