Valuation of shares under earning yield method.

2166 views 1 replies

Please refer Illustration . 4 of Study Material of Financial Reporting, December, 2016 Edition (Module-3, Page No. 9.61) of Final Exam.

In valuation of shares as per EPS yield, Profit before tax for the year 2017 has been taken. But,, in Page No. 9.53, it is clearly stated that Future Maintainable profit should be taken in Yield based valuation. Can we solve the problem with FMP instead of PBT of a single year?

Replies (1)

Please refer to the requirement of the question brother, In the question it is clearly mentioned EPS is basis, still I need to clarify few things here.

  • Valuation is not exact science and the basic rules are to be followed rest all differs from valuer to valuer, one may take FMP here but the objective here is to clear the examinations so be exam oriented.
  • In yield basis yes one needs to take FMP or should I say Adjusted FMP after tax for calculation of earning rate but if specifically, EPS is mentioned just take the actual EPS that is actual profits and not future adjusted profits.


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
ARTICLESHIP 09 June 2026
Article Trainee

Numbertree LLP

Mumbai

CA Inter

View Details
Company
22 June 2026
Finance Manager- Chartered Accountant

Triveni Turbine Limited

Bengaluru

CA

View Details
Company
Featured 26 May 2026
Account Executive

SMJ global advisors pvt ltd

New Delhi

B.Com

View Details
Company
26 May 2026
Education Content Creator

Adyayam Education LLP

Bengaluru

CA Foundation

View Details
Company
Featured 27 May 2026
Lead Conversion Executive / Sales Closing Executive

SMJ global advisors pvt ltd

New Delhi

B.Com

View Details
Company
27 May 2026
Audit Assitant

Virender K Gupta and Co

New Delhi

B.Com

View Details
Company
ARTICLESHIP 04 June 2026
Article

Rakhecha & Co.

New Delhi

CA Inter

View Details
Company
26 May 2026
Audit executive

vdsr & co LLP

Chennai

CA Inter

View Details