How to Value Shares (1)

The equity market is fairly capricious and can lead to losses.

With care and due judgment in valuing shares, however,

substantial profits can be made over and above what can be achieved with relatively less risky securities such as bonds, gilts and bank deposits.

i) `Dividend yield’,

ii) `price earnings (P/E) ratio’ and

iii)‘net asset value’ are the three main tools used in valuing stocks (shares).



By David Opoku