Benjamin Graham Book Value Formula

However this formula was later revised as graham included a required rate of return.

Benjamin graham book value formula. However this formula was later revised as graham included a required rate of return. In 1974 he restated it as follows. But the intrinsic value calculation most attributed to graham today is called the benjamin graham formula and is usually some variation of the following.

Graham later revised his formula based on the belief that the greatest contributing factor to stock values and prices over the past decade had been interest rates. In 1934 benjamin graham one of warren buffett s mentors published his book entitled security analysis and that book contains one of his famous artwork in stock valuation. V e p s 8 5 2 g 4 4 y.

Original benjamin graham value formula the original formula from security analysis is where v is the intrinsic value eps is the trailing 12 month eps 8 5 is the pe ratio of a stock with 0 growth and g being the growth rate for the next 7 10 years. The graham formula proposes to calculate a company s intrinsic value v as.