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Good day Sir !
EPS>> Earning per share
PPS>> price per share
VPA>> Value per share
EY>> Earnings yield ( I don’t know in question, what kind of earning yield they indicate ……….such as interest yield or dividend yield that are only yields I know.)
TE>> Total earning.which of the following is the best expression for the value of the company?
Answer is A
A. TE* (1/EY) (why this format indicates the value of the company? i don’t know at all…)
B. EPS*(1/EY) (what indicates this one? in the answer sheet, it is said value per share.
……………………how we could figure out the value per share in this format?)
C. EPS/PPS>>>>>>>>>>>Dividend cover( I know that)
D. PPS/EPS>>>>>>>>>>>PE ratio ( I know that)There is only one definition of earnings yield – it is earnings as a % of the market value.
Therefore, if earning yield = earnings / market value, then rearranging this gives you:
market value = earnings / earnings yield.Why are you not watching my free lectures? All of this is covered in the lectures and you cannot expect me to type them out here 🙂
The lectures are a complete free course for Paper F9 and cover everything needed to be able to pass the exam well.
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