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Business Valuation using earning yield method

This topic has 3 replies, 2 voices, and was last updated 3 years ago by John Moffat.

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November 26, 2021 at 9:03 am #641667
bucky709
Participant
- Topics: 19
- Replies: 14
Hi,
I have seen some questions where the growth in earnings has been included in the calculations when valuing the company using Earnings Yield method.
How do we know what method is to be applied?
November 26, 2021 at 9:20 am #641682
John Moffat
Keymaster
- Topics: 57
- Replies: 54699
The earnings yield approach (and the PE approach which is effectively the same) only considers the current earnings and does not account for any expected growth in earnings. Have you watched my free lectures on this?
November 26, 2021 at 12:20 pm #641693
bucky709
Participant
- Topics: 19
- Replies: 14
Yes, I have, but some of the questions in the Kaplan kit( like Q212 ) got me confused.
November 26, 2021 at 4:04 pm #641713
John Moffat
Keymaster
- Topics: 57
- Replies: 54699
I do not have the Kaplan Kit (only the BPP Revision Kit).
If it is labelled as being a past exam question, then tell me the name of the question and the date of the exam (because I have all past questions) and then I will be able to explain.
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