Project Report on Valuation of Shares.docx

A Project Report On “VALUATION OF EQUITY SHARES OF FIVE COMPANIES”  Submitted by by

Mr. Vie! A. "#$e S%&'itte( )or t*e re+%ire'ent o) M#,ter o) "%,ine,, A('ini,tr#tion To, To, T*e -irector

Aditya Institute of Management Management NARHE PUNE/  Affiliated to University University of Pune,  Academic Ye Year, 2014-15

-ECLARATION

This is to certify that, I have actually carried out and completed the project work work

enti entitl tled ed..

“VALUATION

OF

EQUITY

SHARES

OF

FIVE

reuirement nt of Master Master of !usine !usiness ss Admin Administ istrat ration ion at COMPANIES”. For the reuireme "une #niversity during the academic year $%&'(&). This "roject *eport has not su+mitted to any other #niversity or Institutions for the award of any other degree or diploma.

"lace ( "une

Mr. -Ivek A. !ale

IN-E0

C*#pte r No. I

II

III

IV

V VI

S%&. C*#pter C*#pter N#'e No Intro(%ction & .& Introduction of tudy & .$ /+jectives of tudy & .0 1ypotheses of tudy & .' cope of tudy &.) Methodology of tudy & .2 3imitation of tudy Concept%#$ St%(4 o) V#$%#tion o) S*#re, $ .& Meaning 4 5efinition of hares $ .$ Features of 6uity hares $ .0 Types of hares $ .' hares 7apital $ .) Method of -aluation of hares Pro)i$e o) )ie Co'p#nie, %n(er St%(4 0 .& Meaning 4 5efinition of 7ompany 0 .$ "rofile of 7ompany An#$4,i, 5 Interpret#tion o) -#t# ' .& Intrinsic -alue ' .$ Market -alue ' .0 Fair -alue O&,er#tion 5 Te,tin1 o) H4pot*e,e, S%11e,tion, "i&$io1r#p*4 

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P#1e No 2 to 3

Intro(%ction 2.2 Intro(%ction o) St%(4 6 7 V#$%#tion o) S*#re,6 -aluation is the processes that links 4 assist to determine the worth of an

asset. It can +e applied to e:pected +enefits from real as well as financial assets 4 securities to determine their worth at a given point of time. This key input the valuation process are;

&. The value of an asset depends on the returns it is e:pected to provide over the holding *isk !earing 7apital”.

2. It is also referred to us permanent capital +ecause euity are not redeemed in the life time of the company.

8.9 T4pe, o) S*#re,67 There are two types of shares. &. "reference shares $. 6uity shares E+%it4 S*#re6

hares which are not preference shares are termed as >6uity hare”. These shares do not carry any preferential right.

8.3 S*#re C#pit#$67 The um total of the nominal value of shares of a company is called its shares capital. The share capital is the two types. &. 6uity share capital $. "reference share capital 2. E+%it4 ,*#re c#pit#$6

>It is the sum total of the nominal value of euity share of a company”. 8. Pre)erence ,*#re c#pit#$6

>It is the sum total of the nominal value of preference share of company”. C$#,,i)ic#tion o) S*#re, C#pit#$6

>Accordingto chedule (2 of the companies Act, &?)2 share capital of the company should +e classified in the capital of the company is divided as under”.

#. A%t*ori:e( ,*#re C#pit#$7 The amount of capital which the company is authori=es to rise +y

memorandum of association and with which the company is registered with the registrar of companies. This capital is also named as >*egistered 7apital or 8ominal 7apital”. &. I,,%e( C#pit#$7 >It is the nominal value of that part of the authori=ed capital which is allotted for cash as well as for consideration other than cash. !ut it cannot e:ceed the authori=ed capital. If issued capital is less than the authori=ed capital, then it means that there is more amount of issued capital”.

C. S%&,cri&e( C#pit#$7

>It means that part of the issued capital which is allotted for cash. 8o distinction can +e drawn +etween issued capital and su+scri+ed capital and unless then shares are su+scri+ed and paid for there cannot +e issued capital”. -. C#$$e( %p C#pit#$7

>It means that part of the allotted share capital which has +een called up +y the company”. E. P#i( %p C#pit#$7

>"aid up capital has +een defined -#'p$e 67

A 7ompany can +e formed for purpose such as charity, research advancement of  knowledge etc. -e)inition In t*e ?or( o) @%,tice Lin($e46

> A 7ompany it an association of main person who contri+ute money or moneys worth to a common stock 4 employ it for a company purpose. The common stock so contri+uted is denoted in money 4 is the capital of the company. The person who contri+utes it or to whom it +elonging are mem+ers”. The companies Act defines a company as >A company formed 4 registered under  this Act or an e:isting company”.

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