Hi dear Tutor, I have some questions.
As we know that we can find market value per share based on dividend yield method,price earning ratio method and earnings yield method and dividend valuation method.
My question is that, if i find market value based on above method,typically market value per share shows different figure and could you explain it briefly?
last time i found based on P/E ration and dividend valuation method.
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Finding market value of share
6y ago#1They will give different values. Dividend valuation depends on the expectation of future dividends and in real life we do not know what dividends shareholders are expecting. The Using the PE ratio assumes that shareholders are expecting similar growth to that of similar companies, and is more practical, but they might not be expecting similar growth.
There is no 'perfect' way. In the exam you are expected to be able to do it the way the question requires, and maybe also to discuss the various ways.
thank you very much my Dear Tutor.
6y ago#3You are welcome :-)
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