Monday, February 25, 2019

Application of stock valuation and its impact of corporate facet Essay

In every business, management and entrepreneurs are concerned with armory military rank for various reasons such as prediction of commercialise equipment casualtys in the future, potential legitimate prices that may necessitate profits or when determine fate value of the company. Several methods are available for express valuation and are chosen depending on the type of the company or extraction valued. In my experience in manufacturing company, I encountered earning per share, (EPS) growth versus estimated price or earnings, (PE) ratio approach for rail line valuation. In this method, the future earnings per share were projected to a given point. The projection was done by ascertain the growth localize of EPS in each year and the growth roll 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 companys current estimated growth rate was fed in the compound interest formula to ob tain 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 companys share.From my stock valuation experience, I found that it is possible to improve the corporate scene by introducing the same stock valuation approach to local market where such knowledge is not available despite constant traffic that require stock valuation such as buying and selling businesses. This is because current value of stock can be determined the predicted ground on growth rate. The total value is determined using other tangible goods in case of sales. The stock valuation method is relevant 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 portal of the method to the medium entrepreneurs and businesspersons in the local e conomy will come down the exploitation of people who lack corporate finance knowledge.ReferenceQuiry, P., & Vernimmen, P. (2011). unified finance Theory and practice. Chicester, West Sussex, U.K Wiley.Source document

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