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P-E based Valuation

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › P-E based Valuation

  • This topic has 2 replies, 3 voices, and was last updated 4 years ago by John Moffat.
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  • September 7, 2021 at 8:10 am #634681
    Sourav9271
    Participant
    • Topics: 164
    • Replies: 117
    • ☆☆☆

    Sir,
    If in question PAT is given and Dividends are given .Then what should be multiplied with P-E
    Should I consider PAT or Earnings after dividend?

    September 7, 2021 at 1:47 pm #634729
    syedmushahid
    Participant
    • Topics: 22
    • Replies: 52
    • ☆☆

    I think only preference share dividend will be deducted and not the ordinary share dividend.
    But final words is with sir John.

    September 7, 2021 at 4:39 pm #634769
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54835
    • ☆☆☆☆☆

    PE means price earnings. We multiply the earning available to shareholders (i.e. after preference dividends, after interest and after tax) by the PE ratio to get the share price.

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