logging in or signing up Valuation of shares mehervijji Download Post to : URL : Related Presentations : Let's Connect Share Add to Flag Embed Email Send to Blogs and Networks Add to Channel Copy embed code: Embed: Flash iPad Dynamic Copy Does not support media & animations Automatically changes to Flash or non-Flash embed WordPress Embed Customize Embed URL: Copy Thumbnail: Copy The presentation is successfully added In Your Favorites. Views: 1061 Category: Education License: All Rights Reserved Like it (0) Dislike it (0) Added: June 07, 2012 This Presentation is Public Favorites: 0 Presentation Description methods of valuation of shares Comments Posting comment... Premium member Presentation Transcript Valuation of shares: Valuation of sharesMethods of valuation: Methods of valuation Net assets method Earnings capitalization method Dividend capitalization method PE model Discounted cash flows method Fair value methodNet assets method: Net assets methodPowerPoint Presentation: Also called as Intrinsic value method or Assess backing method Non Trade investments are also considered Preference share capital is not considered All other calculation is same as capital employed in Goodwill valuationPowerPoint Presentation: Share value = NA/ No. of equity shares Applied for companies - Under Winding Up - Ongoing companies that are capital intensiveEarnings capitalization method: Earnings capitalization methodPowerPoint Presentation: Under this method Earnings are capitalized with NRR to arrive at the value of share EPS NRR NRR – Industry rateApplication of this method: Application of this method Valuation of large block of shares Low capital intensive companies Sometimes Assets may not provide correct base for valuation of shares Long term InvestorsDividend capitalization method: Dividend capitalization methodPowerPoint Presentation: Focus is on capitalization of dividends DPS NRR DPS – Dividend Per Share NRR – expected by shareholdersApplication of method: Application of method Small block of shares Current investorsPrice earning ratio model: Price earning ratio modelPowerPoint Presentation: PE = MV EPS MV = PE RATIO * EPS PE ratio explains how many times earnings per share able to recover the investmentApplication of this method: Application of this method valuing listed companies companies which are highly active in stock market Therefore this method is applicable only to public companies shares.Discounted cash flows method: Discounted cash flows methodPowerPoint Presentation: Future earning cash flows are discounted to arrive at discounted cash flows Where net assets or earnings capitalization is not able to value correctly then we have to go for DCF. focus is on future profits that arise because of synergyFair value method: Fair value methodPowerPoint Presentation: NA + EARNINGS 2 Where capital intensive & earnings also play an important role VALUE OF SHARESpecial points: Special points when there is Calls – in – arrears add it to share capital assuming Notionally received. After calculating value of fully paid shares reduce Calls – in – arrears to arrive at value of partly paid shares No. of shares should be Equivalent number of shares (Fully paid up) Ex dividend basis – proposed dividend shall be deducted from net assets Cum dividend – proposed dividend should not be deducted from net assets You do not have the permission to view this presentation. In order to view it, please contact the author of the presentation.