Enter the total value of the company and the number of outstanding shares into the calculator to determine the implied price per share.
Implied Price Per Share Formula
The following formula is used to calculate the implied price per share.
PPS = TV / OS
Variables:
- PPS is the implied price per share ($)
- TV is the total value of the company ($)
- OS is the number of outstanding shares
To calculate the implied price per share, divide the total value of the company by the number of outstanding shares.
What is Implied Price Per Share?
The implied price per share is a financial metric used to estimate the value of each share of a company’s stock based on the company’s overall market value. This figure is particularly useful for investors and analysts when assessing the value of a company’s shares in comparison to the market price, especially during mergers and acquisitions, or when evaluating private companies.
How to Calculate Implied Price Per Share?
The following steps outline how to calculate the Implied Price Per Share.
- First, determine the total value of the company (TV) in dollars.
- Next, determine the number of outstanding shares (OS).
- Next, gather the formula from above = PPS = TV / OS.
- Finally, calculate the Implied Price Per Share (PPS) in dollars.
- After inserting the variables and calculating the result, check your answer with the calculator above.
Example Problem :
Use the following variables as an example problem to test your knowledge.
Total value of the company (TV) = $1,000,000
Number of outstanding shares (OS) = 100,000
