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Good evening,
Sorry, but could you explain how you have calculated the share price and market capitalisation in Example 1 of P4 notes?
Thank you in advance.
Kind regards,
KarinaI have no idea which example 1 you are asking about (many chapters have an example 1) – which chapter are you referring to?
If you are referring to the example in Chapter 4, then the market capitalisation is calculated by multiplying the total earnings (profits available for shareholders) by the PE ratio.
The share price is calculated by dividing the market capitalisation by the number of shares.
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