The main way to generate income from shares is the economic, financial and strategic development of the company, increasing the value of assets and expanding the business. Therefore, when determining the value of a company's shares, it is necessary to use the methods of evaluating net assets, discounting cash flows and capitalizing profits. When studying the market value of the share of the company, which accounts for the block of shares, the organization's shares are evaluated.
Instructions
Step 1
A share is evidence of the investment of a certain amount of own funds or capital in a joint-stock company. Owning shares provides an opportunity to receive income in the form of dividends. Valuation of the company's shares is carried out in order to bring security to the investment. Analysis of the financial condition of the organization and fundamental analysis of the market allows you to avoid possible mistakes in the face of constant fluctuations in the value of securities. In addition, the valuation of shares gives confidence in the reliability of the decisions made and the rationale for investing funds.
Step 2
Valuation of company shares is also carried out during restructuring of an enterprise, liquidation, implementation of purchase and sale transactions, transfer to trust, obtaining a loan secured by securities.
Step 3
The par value is formed on the basis of official statements on the value of the share. It is at face value that you can determine the approximate value of a security. For all common shares, the par value is equal, but this does not apply to preferred shares.
Step 4
The determination of the nominal price is based on the study of its value as a financial instrument that is capable of making a profit. Securities can bring profit to the owner not only in the form of dividends, but also in the form of a certain increase in the value of the enterprise due to improved financial performance.
Step 5
The most significant factors influencing the result of the share price are the degree of control, size and liquidity.
Step 6
The par value of a share is determined by dividing the share capital by the total number of issued shares. The market and issue value of shares and the amount of dividends are determined based on the par value. It is according to it that the amount that is paid to shareholders in the event of the liquidation of the company is determined.
Step 7
Unlike other types of securities, which have a fixed income, shareholders do not bear obligations to repurchase the company's shares. The share price is determined from the ratio between supply and demand.
