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Justified Forward Price to Earnings Ratio Formula

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Justified Forward Price to Earnings Ratio is a concept used in finance to estimate the appropriate Price to earnings ratio for a stock based on it's expected future earning's growth rate. Check FAQs

JF PE = \frac{\frac{D}{EPS}}{Re - g}

JF_PE - Justified Forward Price to Earnings Ratio?D - Dividend?EPS - Earnings Per Share?Re - Cost of Equity?g - Growth Rate?

Justified Forward Price to Earnings Ratio Example

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Here is how the Justified Forward Price to Earnings Ratio equation looks like with Values.

Here is how the Justified Forward Price to Earnings Ratio equation looks like with Units.

Here is how the Justified Forward Price to Earnings Ratio equation looks like.

1.8E-7 = \frac{\frac{25}{700}}{200000 - 0.2}

1.8E-7 = \frac{\frac{25}{700}}{200000 - 0.2}

1.8E-7 = \frac{\frac{25}{700}}{200000 - 0.2}

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Justified Forward Price to Earnings Ratio Solution

Follow our step by step solution on how to calculate Justified Forward Price to Earnings Ratio?

FIRST Step Consider the formula

JF PE = \frac{\frac{D}{EPS}}{Re - g}

Next Step Substitute values of Variables

∴

JF PE = \frac{\frac{25}{700}}{200000 - 0.2}

Next Step Prepare to Evaluate

∴

JF PE = \frac{\frac{25}{700}}{200000 - 0.2}

Next Step Evaluate

∴

JF PE = 1.78571607143036E-07

LAST Step Rounding Answer

∴

JF PE = 1.8E-7

Justified Forward Price to Earnings Ratio Formula Elements

Variables

Justified Forward Price to Earnings Ratio

Justified Forward Price to Earnings Ratio is a concept used in finance to estimate the appropriate Price to earnings ratio for a stock based on it's expected future earning's growth rate.

Symbol: JF_PE

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Justified Forward Price to Earnings Ratio

Dividend

Dividend is a distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.

Symbol: D

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Dividend

Earnings Per Share

Earnings Per Share (EPS) is the portion of a company's profit allocated to each outstanding share of common stock.

Symbol: EPS

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Earnings Per Share

Cost of Equity

The cost of equity is the return a firm theoretically pays to its equity investors, i.e., shareholders, to compensate for the risk they undertake by investing their capital.

Symbol: Re

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Cost of Equity

Growth Rate

Growth Rates refer to the percentage change of a specific variable within a specific time period, given a certain context.

Symbol: g

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Growth Rate

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FPI = \sqrt{LPI \cdot PPI}

How to Evaluate Justified Forward Price to Earnings Ratio?

Justified Forward Price to Earnings Ratio evaluator uses Justified Forward Price to Earnings Ratio = (Dividend/Earnings Per Share)/(Cost of Equity-Growth Rate) to evaluate the Justified Forward Price to Earnings Ratio, Justified Forward Price to Earnings Ratio is a valuation metric used by investors to estimate a stock's appropriate price to earnings ratio based on its expected future valuation. Justified Forward Price to Earnings Ratio is denoted by JF_PE symbol.

How to evaluate Justified Forward Price to Earnings Ratio using this online evaluator? To use this online evaluator for Justified Forward Price to Earnings Ratio, enter Dividend (D), Earnings Per Share (EPS), Cost of Equity (Re) & Growth Rate (g) and hit the calculate button.

FAQs on Justified Forward Price to Earnings Ratio

What is the formula to find Justified Forward Price to Earnings Ratio?

The formula of Justified Forward Price to Earnings Ratio is expressed as Justified Forward Price to Earnings Ratio = (Dividend/Earnings Per Share)/(Cost of Equity-Growth Rate). Here is an example- 1.8E-7 = (25/700)/(200000-0.2).

How to calculate Justified Forward Price to Earnings Ratio?

With Dividend (D), Earnings Per Share (EPS), Cost of Equity (Re) & Growth Rate (g) we can find Justified Forward Price to Earnings Ratio using the formula - Justified Forward Price to Earnings Ratio = (Dividend/Earnings Per Share)/(Cost of Equity-Growth Rate).

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Justified Forward Price to Earnings Ratio Formula

Justified Forward Price to Earnings Ratio Example

Justified Forward Price to Earnings Ratio Solution

Justified Forward Price to Earnings Ratio Formula Elements

Other formulas in Equity category

How to Evaluate Justified Forward Price to Earnings Ratio?

FAQs on Justified Forward Price to Earnings Ratio

Variable Name