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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › P-E based Valuation
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?
I think only preference share dividend will be deducted and not the ordinary share dividend.
But final words is with sir John.
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.