This page uses a Graham-style earnings-and-growth estimate to compare a modeled value with market price.
Intrinsic Value Calculator
Results
Intrinsic value per share (V)
0
Margin of safety (MS)
0
Table of Contents
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What is Intrinsic Value?
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How to Use This Calculator
- Enter or select Earnings per share (EPS), Current market price (CMP), Expected annual growth rate (g), Corporate bond yield (Y).
- Check the unit beside each measurement. For a percentage or rate, use the scale and time period stated in the form.
- Choose Calculate, then compare the output with the formula and example below. If you change a value or option, calculate again to update the result.
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Formula Used
Value ≈ EPS × (8.5+2g) × 4.4/Y
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Variables Explained
| Input | What it means |
|---|---|
| Earnings per share (EPS) | Earnings available per common share under the selected basic or diluted definition. |
| Current market price (CMP) | The stated purchase or selling amount, in the same currency as the related costs. |
| Expected annual growth rate (g) | The stated rate or percentage, entered using the scale and time period shown in the form. |
| Corporate bond yield (Y) | The stated rate or percentage, entered using the scale and time period shown in the form. |
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Worked Example
EPS 2, growth 5 and bond yield 4.4 give an estimated value of 37.
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Why Use This Calculator?
Compare the result with the underlying statement, budget or proposed transaction. It is most useful when every amount uses the same reporting period and the same accounting definition.
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Common Mistakes
- This historical heuristic is sensitive to growth assumptions and is not an independently verified fair price.
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Frequently Asked Questions
Should I use monthly or annual figures?
Use one consistent period for every amount and rate in the relationship. If a form specifies an annual rate or a monthly amount, follow that label rather than mixing time periods.
Does the result include fees and tax?
Only the costs and taxes represented by the inputs and formula are included. A real transaction can include other charges, so compare the estimate with the underlying agreement or statement.
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Sources & References
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