2.2.4 Share valuation
This short quiz is a chance to quickly check what you know about share valuation. There's no mark for this.
Activity 2.3 What do you know about share valuation?
Q1
What would the fair price be for a share in a company
- with expected annual earnings of 30 pence per share?
- with a sector (price-earnings) P/E average ratio of 15?
Discussion
The ‘fair’ share price is 30 pence × 15.
Q2
What is a company’s ‘dividend cover’?
Discussion
The ratio shows how well placed a company is financially to pay its shareholders a dividend.
OpenLearn - Managing my investments
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