Business valuation formulas?

Can anyone share with me a business valuation formula that could applied to estimate a stock price based on such data as (eps, book value, etc)?

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  • 8 years ago
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    1. In financial markets, stock valuation is the method of calculating "theoretical" values of companies and their stocks. The main use of these methods is to predict future market prices, or more generally, potential market prices, and thus "to profit from price movement" – stocks that are judged undervalued (with respect to their theoretical value) are bought, while stocks that are judged overvalued are sold, in the expectation that undervalued stocks will, on the whole, rise in value, while overvalued stocks will, on the whole, fall.

    2. There are several methods for valuation of Shares and companies. Please read the under noted site for the purpose:

    http://en.wikipedia.org/wiki/Stock_valuation

    3. As regards your specific queries, the answers are:

    i. Value of a share based on PE Ratio:

    -Value of a share = EPS * PE Ratio

    -EPS(Earnings Per Share): This is worked out by dividing Net Profits with the number of outstanding shares.

    -Price to Earnings (P/E) Ratio: To compute this figure, take the stock price and divide it by the annual EPS figure. For example, if the stock is trading at $10 and the EPS is $0.50, the P/E is 20 times.

    -For details, please read at:

    http://en.wikipedia.org/wiki/Stock_valuation

    ii. Book Value Per Share:

    -(Equity + Reserves and surpluses)/Number of outstanding equity shares.

    .

    Source(s): As Above .....
  • 4 years ago

    A fairness opinion on a transaction is to fulfill regulatory standards or company governance concerns self sufficient and objective advice, to make certain the splendid fee to pay or settle for for a corporation Valuations of unlisted companies, companies, shareholdings, goodwill, be attentive to-how, manufacturers and different intangible sources advice for Joint Ventures / Alliances on fairness splits at formation or go out in an self sufficient or propose function help for litigation or arbitration, fairly professional witness and adjudication artwork in corporation valuation disputes Valuation critiques for unquoted debt or fairness gadgets

  • 6 years ago

    The below mentioned formula is a very common for stock/business valuation:

    P = (\frac{E*G}{K^2}) + (\frac{D}{K})

    In a special case where K is equal to 10%, and the company does not pay dividends, SPM reduces to the PEG ratio. For more information, you may visit the following website, I hope you will be able to solve your problems

  • 7 years ago

    You can find the online stock valuation calculator in this link. This might be helpful.

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