We use cookies to give you the best experience possible. By continuing we’ll assume you’re on board with our cookie policy

Application of stock valuation and its impact of corporate facet Essay

Sorry, but copying text is forbidden on this website!

In every business, management and entrepreneurs are concerned with stock valuation for various reasons such as prediction of market prices in the future, potential current prices that may necessitate profits or when determining share value of the company. Several methods are available for stock valuation and are chosen depending on the type of the company or stock valued. In my experience in manufacturing company, I encountered earning per share, (EPS) growth versus estimated price or earnings, (PE) ratio approach for stock valuation. In this method, the future earnings per share were projected to a given point. The projection was done by determining the growth rate of EPS in each year and the growth rate that was obtained from the past years was used to estimate future stock price (Quiry, & Vernimmen, 2011). When the price of stock was obtained, the company’s current estimated growth rate was fed in the compound interest formula to obtain the current value of share, which was referred to as intrinsic value. The value was the tagged in the stock market as the current price of the company’s share.

From my stock valuation experience, I found that it is possible to improve the corporate facet by introducing the same stock valuation approach to local market where such knowledge is not available despite constant transaction that require stock valuation such as buying and selling businesses. This is because current value of stock can be determined the predicted based on growth rate. The total value is determined using other tangible goods in case of sales. The stock valuation method is applicable in the current market where there is constant selling and buying out of businesses. When the owners are able to estimate the stock value at the time of sale, there will low probability of undervaluing or overvaluing the business. Therefore, the introduction of the method to the medium entrepreneurs and businesspersons in the local economy will decrease the exploitation of people who lack corporate finance knowledge.

We will write a custom essay sample on Application of stock valuation and its impact of corporate facet specifically for you

Order now

Reference

Quiry, P., & Vernimmen, P. (2011). Corporate finance: Theory and practice. Chicester, West Sussex, U.K: Wiley.

Source document

How to cite this page

Choose cite format:

Application of stock valuation and its impact of corporate facet. (2015, Aug 06). Retrieved from http://trackerfastme.info/application-of-stock-valuation-and-its-impact-of-corporate-facet-essay

We will write a custom essay sample onApplication of stock valuation and its impact of corporate facetspecifically for you

Our customer support team is available Monday-Friday 9am-5pm EST. If you contact us after hours, we'll get back to you in 24 hours or less.

By clicking "Send Message", you agree to our terms of service and privacy policy. We'll occasionally send you account related and promo emails.
No results found for “ image
Try Our service
online

Hi, I am Sara from Studymoose

Hi there, would you like to get such a paper? How about receiving a customized one? Check it out http://goo.gl/CYf83b

online

Hi, I am Sara from Studymoose

Hi there, would you like to get such a paper? How about receiving a customized one? Check it out http://goo.gl/CYf83b

image

Your Answer is very helpful for Us
Thank you a lot!

Sitemap