Answer : Four
(4) suitable situations that may lead to the valuation of shares is
as follows :-
1. Mergers and
Accquisition :
- If a comapny is having a growth prospect mergers and
accquisition provide a great platform for this.
- Valuation of shares are done to find out the fair price of
shares which is to be paid to acqurring comapny.
2. Exit
Strategy Planning :
- If any company is planning to sell it's business in the market
the best method is to set a base line for valuation of share.
- It hepls the company to attain the maximun profitability.
3. Funding
:
- When investors want to raise fund from the market the best
possible way to generate maximum funds from banks is to value their
shares prices.
- Professionals help investors by correctly valuing shares and
make them raising fund from the banks.
4.
Litigation :
- During any litigation or any loss caused by company or to the
company valuation of shares help the company to find out the actual
payment to be done or to be received.
- Actual worth of a business can be find out by proper valutaion
of shares.