- This topic has 4 replies, 2 voices, and was last updated 1 year ago by
John Moffat.
John Moffat.-
Posts
-
vavneetb
- Topics: 170
- Replies: 123
- ☆☆☆
Hi
I am really struggling in business valuation chapter, how do I find issue price If the cost of equity is given? By using DVM
In question ke is 14%
And answer says, Fair MC = lv of future dividend ms discounted at ke14%
Divined next year is = 0.14m expected growth is 4%
0.14m/(0.14-0.04)vavneetb
- Topics: 170
- Replies: 123
- ☆☆☆
Also, is there any calculation difference between listed and unlisted companies in business valuation chapter?
John Moffat
- Topics: 57
- Replies: 49598
- ☆☆☆☆☆
Are you watching the free lectures working through the chapters (because it is pointless using the notes without watching the lectures that go with them).
With regard to the first question, you are not asked to find the issue price. You are asked to find the current market value and for that we use the dividend valuation formula.
With regard to your second question, the approaches are the same for unlisted companies although as I explain in my lectures when using a PE ratio valuation we use a lower PE ratio because of the shares not being as easily tradeable.
vavneetb
- Topics: 170
- Replies: 123
- ☆☆☆
I have watched lectures, could you please specify which chapter is related to business valuation, I want to study that again specifically. Thanks
John Moffat
- Topics: 57
- Replies: 49598
- ☆☆☆☆☆
The two chapters on “the valuation of securities”.
vavneetb
John Moffat- You must be logged in to reply to this topic.