Compose a 4000 words assignment on valuation of securities and cost of capital. Needs to be plagiarism free!

Compose a 4000 words assignment on valuation of securities and cost of capital. Needs to be plagiarism free! These book values are unreliable because they might be significantly different from the current value of these assets. The values of assets and liabilities are based on past transactions that demonstrate no account of the future prospects.

A company's assets can be evaluated on the basis of their market values. Market value of shares can be determined when they are traded on a recognised stock exchange. The share values estimated from the current market price are actual values, however this procedure becomes difficult when the company is unquoted. The market value of shares, which is also known as market capitalisation, is obtained by multiplying a company's total shares in issue with the current market price per share. The current market price of Tesco plc is 384.50p per share and Sainsbury plc is 395.00p per share. Hence, the market capitalisation of Tesco and Sainsbury is 3,007m and 663m respectively (see appendix I).

P/E ratio is obtained when current market price per share is divided by earning per share. When the same ratio is inversed and earning per share is dividend by market price per share we get Earnings Yield.