Price earnings ratio valuation, Finance Basics

Price Earnings Ratio Valuation

P/E ratio is traditionally employed for valuation of shares however it is an important ratio in the valuation of business. The P/E ratio is the measure of how many years earning would 'purchase' the market value of the business and is given via as:

P/E ratio = MV/E

MV = P/E x E

NB: The value of the business can be calculated with taking estimated earnings x P/E ratio.


Posted Date: 1/31/2013 1:49:10 AM | Location : United States

Related Discussions:- Price earnings ratio valuation, Assignment Help, Ask Question on Price earnings ratio valuation, Get Answer, Expert's Help, Price earnings ratio valuation Discussions

Write discussion on Price earnings ratio valuation
Your posts are moderated
Related Questions

What is the one-year Treasury security rate of 1R1? For 1R3=11%, E(2r1)= 4% and E(3r1)=5%

Elephant Company common stock has a beta of 1.2. The risk-free rate is 6% and the expected market rate of return is 12%. Determine the required rate of return on the security.

Advantage of Joint Stock Companies The company can own assets and incur liabilities on its own accord. Perpetual existence as or going to relate that allows the compan

A Ltd.'s share gives a return of 20% and B Ltd.'s share gives 32% return. Mr. Gotha invested 25% in A Ltd.'s share and 75% of B Ltd.'s shares. What would be the expected return of

Example of Net Present Value Method Cost of investment = 100,000/=, Interest rate = 10percent, Inflows year 1 = 80,000/= Year 2 = 50,000/= NPV   = 80,000 / 1.1 + 5

Public Limited Companies These are joint stock companies that have sold shares to specific public and thus have attracted public money in form of share capital.  Those compani

Why are financial institutions heavily regulated, with specific focus on their ability to increase or reduce the money supply?

what do you consider to be the main inbound logistics for banking