Which of the following represents a traditional view of a "good" price-to-book ratio?

A price-to-book (P/B) ratio provides a measure of the market's valuation of a company's equity compared to its book value. A traditional benchmark for a "good" P/B ratio is typically considered to be a value less than 1.0. This suggests that the market values the company less than its actual net worth as reflected on its balance sheet. When the P/B ratio is below 1.0, it may indicate that the stock is undervalued, and thus potentially a good investment opportunity. Investors may interpret this as a chance to acquire the company's assets at a cheaper price than they are worth on paper.

A P/B ratio greater than 1.0 could suggest that the market values the company higher than its book value, which in some cases might be justified if the company has strong future growth prospects or intangible assets not reflected in the book value. However, in the context of identifying a traditionally "good" P/B ratio, a value below 1.0 better aligns with the concept of undervaluation. Therefore, the answer highlighting a value less than 1.0 accurately captures the traditional view of a favorable P/B ratio.