british ariways does not pay dividend so how can you value the company?

Answer 1

It's got assets that are worth a pretty penny.

Answer 2

In theory a stock is worth the value of discounted future cash flows. Current dividends aren't the only potential cash flow. Future dividends certainly have to be considered but most importantly is the potential revenue from selling shares in the future. That really means that the market is probably the best way to value the stock.

But also look at it this way, if the company is earning 500 million Pounds each year what would that earnings stream be worth? That's the value that someone wanted to buy the whole company for would consider. Of course, this has to take into account expectations for changes in that earnings stream.

Answer 3

It's been a long, long, long time since I had any sort of accounting class in college, but I can think of two ways:


By what a buyer is willing to pay for the stock - odds are, the average price bid for the stock will be close its the true worth. There will always be people who want to lowball their bid, hoping to get a bargain. There will always be people who have pie-in-the-sky dreams and think that the stock price will rise to meet them. The average is probably pretty close to the truth, especially if its from institutional buyers who have the resources to study the company closely.

By the assets listed on the balance sheet - if the company has to disclose its financial statements, then this statement should give you a good idea of what its tangible and intangible assets are worth. Divide that by the number of shares outstanding, and you should have an idea of what the company thinks a share should be worth.

Answer 4

i value it highly cuz i fly on BA