Let’s solve this step by step.
We are given a valuation model for a company (DiscoverCI) and asked to find the
% Under or Over valued — which is already shown in cell D40 as
-31.39%, but we need to verify that this number is correct based on the inputs and calculations provided.
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Step 1: Understand what “% Under or Over valued” means
This percentage tells us how much the current stock price differs from the calculated fair value per share.
Formula:
> % Under/Over Valued = [(Calculated Value per Share – Current Stock Price) / Current Stock Price] × 100%
If the result is negative, it means the stock is
overvalued (current price > fair value).
If positive, it’s
undervalued.
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Step 2: Find the Calculated Value per Share
From the table:
-
Value of Equity (cell D36) = $993,507,981,979
-
Total shares outstanding (cell D37) = 4,650,000,000
So,
> Value per share = Value of Equity ÷ Total Shares Outstanding
> = 993,507,981,979 ÷ 4,650,000,000
Let’s calculate that:
First, divide:
993,507,981,979 ÷ 4,650,000,000 ≈ ?
Do the division:
≈ 213.657... → which rounds to
$213.66 (as shown in cell D38)
✔ So, calculated value per share =
$213.66
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Step 3: Get the Current Stock Price
From cell D39:
Current stock price = $311.43
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Step 4: Plug into the formula
% Under/Over Valued = [(213.66 – 311.43) / 311.43] × 100%
First, subtract:
213.66 – 311.43 =
-97.77
Now divide:
-97.77 ÷ 311.43 ≈ -0.3139
Multiply by 100%:
-0.3139 × 100% =
-31.39%
✔ This matches the value in cell D40.
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Final Check
All steps match the spreadsheet:
- Value of equity → divided by shares → gives $213.66 per share
- Compared to current price $311.43 → difference is -$97.77
- Percentage: -31.39%
No errors found.
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Final Answer:
-31.39%
Parent Tip: Review the logic above to help your child master the concept of business valuation worksheet.
