What You Will Learn!
- Valuation of Share
- Introduction of Share
- Need or Purposes of valuation of shares
- Examples of Amalgamation
- Examples of Absorption / Merger
- Methods of Valuation of Shares
- ASSETS VALUATION METHOD
- Face value same but paid up value different
- Income valuation method
- Valuation of Share by Rate of Dividend Method
- Valuation of share by Rate of Earning Method
- Fair valuation method or Average method
- Earning per share method
Description
Introduction of Valuation of Shares
Need or Purposes of valuation of shares:
1. On Amalgamation in nature of purchase
Examples of Amalgamation
A. Glaxo + SmithKline Beecham = GSB
B. Arcelor Ltd + Mittal steel Ltd = Arcelor Mittal Ltd.
C. Brooke bond Ltd + Lipton Ltd = Brooke bond India Ltd.
D. Vodafone Ltd + Idea Ltd = Vodafone idea Ltd
E. IDFC bank + Capital first = IDFC first bank Ltd
F. Fox wagon India Pvt Ltd + Fox wagon group sales India Pvt Ltd + Skoda auto India = Skoda auto fox wagon India Pvt Ltd
2. On the internal reconstruction of the company
3. On conversion of shares
4. Shares of private companies
5. Transfer of shares as gift
6.For taking loan on share’s security
7. For determination of wealth tax
8. Nationalization of companies
9. On Absorption of a company
Examples of Absorption / Merger
1) Hindustan Unilever Ltd - kwality foods Ltd
2) Jet airways - Sahara airlines
3) Hutch - Essar
4) Vodafone - Hutch
5) Mahindra - Satyam computers
6) Microsoft - Skype
7) Google - Youtube
8) Google - Motorola
Methods of Valuation of Shares
(1) Assets valuation method :-
(a) Valuation of share by Assets valuation method (For ESC) : Total Assets and External Liabilities
Face value different and paid up value different
Face value same but paid up value different
Assets valuation method (For PSC)
Rules for valuation of preference share
(2) Income valuation method
Income valuation method or Dividend yield method
2 (a) Valuation of Share by Rate of Dividend Method : Valuation of equity share, Valuation of Preference share
2 (b) Valuation of share by Rate of Earning Method
(3) Fair valuation method
Fair valuation method or Average method
(4) Earning per share method
Who Should Attend!
- Any Student who pursuing in B,com M,com BBA MBA 11th & 12th Commerce C.A. C.S. and C.M.A.
