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Valuation of Shares - Introduction Video Lecture | Advanced Corporate Accounting - B Com

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FAQs on Valuation of Shares - Introduction Video Lecture - Advanced Corporate Accounting - B Com

1. What is the importance of valuing shares in a company?
Ans. Valuing shares in a company is important as it helps investors make informed decisions about buying or selling stocks. It also helps in determining the true worth of a company and can be used for various purposes such as mergers, acquisitions, and fundraising.
2. What are the different methods used for valuing shares?
Ans. Some common methods used for valuing shares include the asset-based approach, income approach, and market approach. Each method has its own set of calculations and assumptions to determine the value of shares.
3. How does the market approach work in valuing shares?
Ans. The market approach involves comparing the company's financial metrics, such as price-to-earnings ratio, with similar publicly traded companies. This method relies on the principle that the market price of a company's shares reflects its true value.
4. What factors can impact the valuation of shares in a company?
Ans. Factors such as the company's financial performance, industry trends, economic conditions, and market sentiment can all impact the valuation of shares. Changes in these factors can cause fluctuations in the share price.
5. How can shareholders use the valuation of shares to make strategic decisions?
Ans. Shareholders can use the valuation of shares to determine whether to hold, buy, or sell their stocks. It can also help in assessing the company's growth potential and overall financial health, guiding shareholders in making strategic investment decisions.
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