Calculation of intrinsic value of shares

Others 1347 views 1 replies

Dear friends,

When we calculate intrinsic value of shares, why don't we consider miscellaneous expenses like Preliminary expenses and discount on issue of debentures ?

 

What is the reason for not taking those items in the balance sheet in our intrinsic value calculation ?

 

Replies (1)
When we calculate IV of shares, the basic formula is 'Assets-Liabilities' & resultant we get Net Assets which belong to Equity Shareholders & misc expenses like preliminary expenses & discount on issue of debs etc form part of EQUITY SHARE CAPITAL & not Assets or Liabilities. I hope ur confusion has been resolved.


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