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How Are Public (listed) Companies Valued? - Business - Nairaland

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How Are Public (listed) Companies Valued? by ultron12345: 9:37am On Jul 10, 2017
Goodday Nairalanders,

Pls, can someone help me out with this.

(1). The value of a company is its Market capitalization which is the number of shares multiplied by stock price.
If a company wants to list on the stock exchange, how is its listing stock price determined in order to arrive at the market cap?

(2) -Nigerian Breweries has a revenue of N307B and Market cap of N1.25T
-Nestle Nigeria has revenue of N151B and market cap of N760B
-Forte Oil has a revenue of N146B and market cap of N256B
-Dangote Cement has a revenue of N290B and market cap of N4T
.............(Note that some of the above figure might not be current)............
If you compare the market cap to revenue ratio of the above listed companies, NB is 4.07, Nestle is 5.03, Forte Oil is 1.7, Dangote Cement is 13.8.
(a) why are the differences in the market cap to revenue ratio?
(b) must market cap be higher than revenue?
(c)why the huge gap between the market cap to revenue ratio of Dangote Cement and other companies?

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