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Sir a Bpp kit q no 222 called Danoca Co says it is shortly to pay its annual dividend.Financial information presented state that its ex div share price value is $3.30.But while calculating value for this company they did not use $3.30 as a value per share.Why ??
Sir, if there is a current earnings and forecast earning figure, and a PE ratio is given, which earnings figure will be useful in valuation of a company?
For a current valuation then strictly the current earnings (because the PE will presumably have come from similar companies and is calculated based on current earnings).
Forecast earnings would be relevant if the company is doing something that will increase the earnings and you are required to forecast the effect there will be on the value of the business.
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