Answer to Question #176490 in Accounting for Ryan

Question

Stock Valuation JAN 2014

Answer 1

Solution:

Stock valuation is a way of establishing the intrinsic value or theoretical value of company stock. The main purpose of stock valuation is to predict the future prices or potential market prices for the investors to gauge their sales or purchase of investments. The fundamentals of stock valuation aim to value the intrinsic value of the stock that shows the profitability of the business and its future market value.

Stock valuation for any company is calculated by dividing the stock price by the earnings per share.

The stock valuation for 2014 can be seen on the stock exchange site, where they are displayed for all listed companies.