Following are the most common methods used for equity valuation: Method # 1. Based on Balance Sheet: i. Book Value: It is the net worth of a company divided by number of outstanding shares. Net worth is equal to paid-up equity capital plus reserves and surplus minus losses. ii. Liquidation Value: Liquidation value is different than a book valuation. [...]
Consequent to buyback of shares, there will be change in the shareholding pattern. This could alter the controlling interest in the company without ensuring compliance with prevalent government regulations for increase in shareholding. Consider the following illustration: Illustration 1: Company A is a publicly listed company and Company B is a Joint venture which is closely held. If there is [...]
This article will help you to learn about how to calculate shares repurchase price. In times of surplus cash available with the firm and no investment opportunities are available to profitably deploy the surplus funds, a company may use those funds to repurchase shares from the shareholders. With repurchase of shares, few shares remaining outstanding which will result in increased [...]