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Valuation of Shares - Yield Basis/ Earning Basis/ Market Value Basis Video Lecture | Advanced Corporate Accounting - B Com

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FAQs on Valuation of Shares - Yield Basis/ Earning Basis/ Market Value Basis Video Lecture - Advanced Corporate Accounting - B Com

1. What is the Yield Basis valuation of shares?
Ans. Yield Basis valuation of shares is a method that calculates the value of a share based on the expected yield or return that an investor can earn from holding the share. This method takes into consideration the dividends paid by the company and the expected rate of return on the investment.
2. How is Earning Basis valuation of shares determined?
Ans. Earning Basis valuation of shares is calculated by estimating the future earnings of the company and applying a suitable price-to-earnings (P/E) ratio to determine the value of the shares. This method focuses on the company's profitability and growth potential.
3. What is Market Value Basis valuation of shares?
Ans. Market Value Basis valuation of shares is a method that determines the value of shares based on the current market price of the shares. This method considers the supply and demand dynamics in the market and reflects the perceived value of the shares by investors.
4. How can an investor use Yield Basis valuation to make investment decisions?
Ans. An investor can use Yield Basis valuation to compare the expected yield of different investment options and choose the one that offers the best return. By analyzing the dividend yield and expected growth of a company, investors can assess the attractiveness of investing in its shares.
5. What are the advantages of using Earning Basis valuation of shares?
Ans. Earning Basis valuation provides a comprehensive view of a company's financial performance and growth prospects, making it easier for investors to assess the value of its shares. This method also allows for comparisons between different companies in the same industry based on their earnings potential.
89 videos|52 docs|22 tests
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