Dear All
A Pvt. Ltd company want to convert director loan into equity. Company book value of a share is Rs.30/- may I know how to calculate fair value of a share ? and also let me know can pvt. Ltd. Co. issue share at premium to directors?
6 Replies
ashish gupta
( student)
(1922 Points)
Replied 03 October 2011
Dear Friend there are several methods for valuation of shares. No one can say what is the fair value.
it depends upon the parties how they see whats the worth of share.
But if everything stated in Balance Sheet is correct then book value of share can indicate the fair value.
And yes pvt company can also issue shares at premium
Pankaj Arora
(Learner)
(3134 Points)
Replied 03 October 2011
Thanks bro could you pls mention an method of share valuation with example?
ARUN KUMAR
(Financial Consultant )
(992 Points)
Replied 03 October 2011
1.NET ASSETS VALUE METHOD
2. BOOK VALUE METHOD
Pankaj Arora
(Learner)
(3134 Points)
Replied 03 October 2011
can you pls tell me in brief with examples of both the methods?
ashish gupta
( student)
(1922 Points)
Replied 03 October 2011
Pankaj its not that easy to explain the methods here. But Wait m trying to work on this.
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