Example of earnings yield valuation, Finance Basics

Assignment Help:

Example of Earnings Yield Valuation

Estimated maintainable earnings are £240,000 per annum; rate of return required is 25 percent.

Calculate the value of the business.

Value MV) =       E/ EY x 100

                =       240,000/0.25 x 100

   M.V.      =       £960,000

This method can be transformed into the theoretical base, particularly if the business is going to relate.

PV = C/i (1-(1/ (1+0.25) N))                                          

Note as

Like N approaches ∞

PV = C/r

     = 240,000/ 0.25

     = £960,000


Related Discussions:- Example of earnings yield valuation

Advantages of central depository system or cds, Advantages of Central Depos...

Advantages of Central Depository System or CDS 1. It shortens the registration procedure in the stock exchange that is high speed of registering shareholders. 2. It improve

Financial management, Financial Management On the other hand a financi...

Financial Management On the other hand a financial manager has to meet the company's strategic or long term needs as long term investment are helpful to the company since:

Relationship among money, Relationships and interactions among money, bond,...

Relationships and interactions among money, bond, stock and mortgage markets

Illustrate role of credit unions in depository institutions, Illustrate the...

Illustrate the role of credit unions in depository institutions. Credit unions: Credit unions are non-profit institutions equally organised and owned through their member

Discounts and credit terms, Discounts and Credit Terms Credit Terms ...

Discounts and Credit Terms Credit Terms Credit terms involve both the length of the credit time and the discount specified.  The terms 2/10, n/30 means that a 2 percent d

Cum. and ex. - terms used in capital market authority, Cum. And Ex. - Terms...

Cum. And Ex. - Terms Used in Capital Market Authority           These prefixes are written in front of other words as like capital, rights and dividends to qualify them."Cum" i

Advantages of floatation of new shares, Advantages of Floatation of New Sha...

Advantages of Floatation of New Shares 1. It facilitates the matter of securities to increase new finance, creation a company less dependent on retained earnings and banks.

5 problem excel on time value concepts, How quickly could something like th...

How quickly could something like this be done? And how confidential is this? Has any student ever been caught using this service?

Forms of business organizations, Forms of Business Organizations The te...

Forms of Business Organizations The term business is wide in meaning. It includes all human activities made for the sake of earning profits through the process of production of

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd