- Earnings Value (EPV) is a stock valuation method that looks at a firm’s current cost of capital.
- EPV ignores some important financial aspects such as future growth and competitors’ assets.
- EPV is calculated by dividing a company’s adjusted earnings by its weighted average cost of capital.
- EPV equity can be compared to a company’s current market capitalization to determine if a stock is fairly valued, overvalued or undervalued.