Calculation of fair price of equity share
kanwal
(Querist) 12 February 2012
This query is : Resolved
how a culculation of fair price of equity shares can be done in case of delisting of shares by the Government Company. The price of the share is Rs. 10/-
Advocate. Arunagiri
(Expert) 12 February 2012
Unfit query for legal experts. Post it in CAClub.
V R SHROFF
(Expert) 12 February 2012
Do as directed by Shri Giri
Raj Kumar Makkad
(Expert) 13 February 2012
This is not proper fora to resolve your query.
A V Vishal
(Expert) 13 February 2012
Equity value can be calculated two ways, either the intrinsic value method, or the fair market value method. The intrinsic value method is calculated as follows:
Equity Value = Market capitalization
+ Amount that in-the-money stock options are in the money + Value of equity issued from in-the-money convertible securities
- Proceeds from the conversion of convertible securities
The fair market value method is as follows:
Equity Value = Market capitalization
+ fair value of all stock options (in the money and out of the money), calculated using the Black–Scholes formula or a similar method + Value of convertible securities in excess of what the same securities would be valued without the conversion attribute
The fair market value method more accurately captures the value of out of the money securities.
kanwal
(Querist) 13 February 2012
Thank you very much Sir. It is requested please understand me with the example
M/s. Y-not legal services
(Expert) 13 February 2012
