Valuation using Ben Graham Formula

The famous Ben Graham stock valuation formula for valuating growth stock with steady long-term earnings growth rate.

Value = (earnings x (8.5 + 2g) x 4.4) / Y

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Valuing "WPP WPP PLC"

Valuation Assumptions

Latest quoted share price	£
Number of ordinary shares


Latest reporting financial year
Total cash & cash equivalents	£
Total interest-bearing debts	£

Earnings	£
Long-term earnings growth rate (g)	%
Investment grade corporate bond yield (Y)	%
P/E for zero growth stock	x
Earnings growth multiplier	x

Valuation Results

£-4.77
Intrinsic value

-157.1%
Value Vs Price variation

Calculations

Value of company operations	£-1,347,657,618
+ Add cash & cash equivalents	£2,218,000,000
- Less total interest-bearing debts	£5,995,000,000
Business intrinsic value	£-5,124,657,618
Business intrinsic value per share	£-4.77

+Tips & Advice

The drawback of the Ben Graham formula is that the growth rate is a big element of the overall valuation. Use PE ratio for no growth stock between 7 and 8.5 and growth multiplier between 1.5 and 2 to be more conservative.