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Friday, 25 July 2008
 
 

Price Earnings - Business Valuation Method

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Price Earnings - Business Valuation Method

A company's value under the Price/Earnings business valuation method is based on the assumption that the company value should be similar to companies whose shares are traded in the stock market. The company's value is calculated according to the future profit of the business and the industry average P/E ratio or the P/E ratio of another firm with a similar business profile.
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