Valuation and Pricing of Shares

Mitali (Finance Professional) (11356 Points)

22 April 2023  

Valuation and pricing of shares can vary depending on whether the shares are quoted or unquoted. Quoted shares are publicly traded on a stock exchange, while unquoted shares are not. Here's a brief overview of the valuation and pricing of both types of shares:

Quoted shares:
Quoted shares are valued based on their market price, which is determined by supply and demand on the stock exchange. The market price is affected by a range of factors, including company performance, economic conditions, and investor sentiment. Investors use a range of methods to value quoted shares, including price-to-earnings ratios, dividend yields, and discounted cash flow analysis.

Unquoted shares:
Unquoted shares can be more difficult to value, as there is no readily available market price. The value of unquoted shares is usually determined through a process of negotiation between the buyer and seller, with the assistance of a professional valuer or accountant. Factors that can affect the value of unquoted shares include the financial performance of the company, the strength of its management team, the competitive landscape, and the potential for future growth.