P/E Method

P/E of Comparable Steel Company

Earning per share of India Iron and Steel Company

(IISCO)for 2013-14

Rs 112 per share

Rs.

Valuation of company IISCO based on P/E

P/B method
P/B of comparable private sector banks
EPS of ABC Bank as on 31 March 2014
Valuation of ABC Bank

448
6

Rs

100
600

Liabilities
Capital
Reserves
Borrowings
Payables

Total Assets
Total liabilities
Net Asset
Book Value
NAV per share

Rs cr

Asset
100 Plant and Machinary
12 Stock in trade
181 Investments
25 Receivables
Bank Balance
318
Rs.
330 Number of shares
218
112
112

valued at NAV or +(-) x% of NAV

Rs cr
200
55
25
30
20
330
10000000

Rs
Dividend
Growth
Cost of Capital
Valuation

10
5%
10%
200
Dividend of Rs 10 with a growth
of 15% for first 5 year and then
10% thereafter
1
10 0.909091
2
10.8 0.826446
3
11.664 0.751315
4 12.59712 0.683013
5 13.60489 0.620921
5 272.0978 0.620921
13.60489
272.0978

Rs 10 with a growth
rst 5 year and then
ter
9.090909
8.92562
8.763336
8.604002
8.447566
168.9512
212.7827