How is private equity shares calculated


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Querist : Anonymous

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Querist : Anonymous (Querist)
16 November 2013 Dear Friends,

I have started a pvt ltd company, where there are three share holders

A holds 2500
B holds 2500
c holds 5000 shares (C is a investment company)

Now I wish to know if some one wish to associate with us how can the equity shares be distributed and valued.

Also, in general if some project of C company is done through my company how is the payment routed and now C company says any project through C company money will be routed through them it will not taken as my company project directly with the client.

so I want to know how far it is fair enough.

Thanks in advance. Seniors pls reply

18 November 2013 Take the Balance Sheet, Calculate the current values of all the Assets (The value should be the fair value means the market value of the asset not the book value), add up the goodwill amount (may be formula based or a amount u think is justified for the business). Then to this amount deduct all the liabilities for the business. The amount balance is called as the Capital Invested.
The value of equity share would be Capital invested divided upon No. of Shares.

This is a complicated process normally a CA or a Actuarial Valuer does all this calculations.


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