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Formulas: EBIT - EPS Analysis
Formulas: EBIT - EPS Analysis
LESS: Taxation
×××× ×××× ×××× ××××
Net Earnings
×××× ×××× ×××× ××××
____________
Number of Equity Shares
NET INCOME APPROACH (NI Approach)
Calculation of Total Value of Firm and Overall Capitalization Rate
Existing New Debt (or)
New New
Equity Debentures (0r)
Particulars Equity Preference
Share Loans (or)
Shares Shares
Capital Borrowings
Earnings Before Interest and
Tax (EBIT)
×××× ×××× ×××× ××××
EBIT
Overall Capitalization Rate (Ko) =
Total Value of Firm
Market
Total Value of
Market Value of Equity = - Value of
Firm
Debt