20000 Net Profit

8000 Dividend
P 20 DPS 400

P 100000
5000

Ps 5000

Valuing net profit/Book Value

Growth Rate Retention ratio*ROE 6
3.6

P D/(ke-g)
P/E D/E/(Ke-g) D/E
P/E Payout/(Ke-G)
P (EPS*Payout)/(Ke-G0
P (BV*ROE*payout)/(Ke-G)
 Ke 13% 12000 Retention
G 5%

P Dividend/(Ke-G)

Ps Ds/(ke-g)

8000/20000 0.4 payout

0.6 retention

ROE EPS/BV 47
114
Gordon Growth Value Dicount your cash
Value of my share Dividend Shares
Price
WACC Ke Kd

FCFF Firm WACC

FCFE Equity Ke
Divided Equiy Ke Two stage model
 100
13% ke Rf+B(Rm-Rf)
Dividend/(Ke-g) 1250 g 5%

D*(1+g)/(ke-G) 1313
perpertuity

Two stage model

0 1 2 3 3
100 6% 6% 6% 5%
100 106 112.36 119.1016 1563.2085
93.80531 87.994361 82.543383 1083.3819
1347.725
DCF FCFF WACC Price
Enterprise value
Relative valuation
Tata Motors Automobile Industry Avg 2021
P/E EV/EBITDA Earnings 2000
P/S EV/EBIAT EBITDA 4000
P/B EV/EBIT

Price Market price

Earnings Net Income
Sales Sales of company
Book Vlaue Total assets- total liabilities
Market Value Share price Outstanding shares
Shareholders and debt Share price Outstanding shares Debt

14 price 28000 20 crores 1400

15 EV 60000
Debt 32000
Equity 28000 1400

Assets Liabilities Equity