Valuation of shares refers to the process of determining the worth or value of a company’s shares of stock. There are several methods used to evaluate shares, including:

1. Market Capitalization: Market capitalization, or market cap, is one of the most common methods of valuing shares. It is calculated by multiplying the current market price of a company’s shares by the total number of outstanding shares. Market cap provides a snapshot of the total value of a company as perceived by investors in the stock market.
2. Earnings Multiple: This method involves using a multiple of the company’s earnings (such as earnings per share or EBITDA – earnings before interest, taxes, depreciation, and amortization) to determine its value. The earnings multiple can vary depending on factors like industry norms, growth prospects, and risk.
3. Discounted Cash Flow (DCF): DCF analysis involves estimating the future cash flows of the company and discounting them back to their present value using a discount rate that reflects the riskiness of the investment. This method takes into account the time value of money and provides an intrinsic value for the shares.
4. Comparable Company Analysis (CCA): CCA involves comparing the valuation multiples (such as price-to-earnings ratio or price-to-book ratio) of the target company with those of similar publicly traded companies. This method helps to determine whether a company’s shares are undervalued or overvalued relative to its peers.
5. Asset-Based Valuation: This method involves valuing a company’s assets (both tangible and intangible) and subtracting its liabilities to determine the equity value. The value of shares is then divided by the total number of outstanding shares to arrive at the share price.
6. Dividend Discount Model (DDM): DDM calculates the present value of all future dividends that a company is expected to pay to its shareholders. This method is commonly used for valuing shares of dividend-paying companies.
7. Book Value: Book value per share is calculated by dividing the company’s total equity (assets minus liabilities) by the total number of outstanding shares. It represents the value of each share if the company were to be liquidated at its book value.

Each of these methods has its strengths and weaknesses, and the appropriate method(s) to use depends on factors such as the company’s industry, stage of growth, financial performance, and market conditions. It’s common for analysts to use multiple valuation methods to arrive at a comprehensive assessment of a company’s share value.