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Erudite AfricaCenter of Excellence
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Valuing shares, corporate actions and the Bank A capstone

Module 05 / 5 · 70 min

Value a listed Ethiopian bank with dividend discount and price-to-book methods, work out what rights and bonus issues do to holders, and defend a buy, hold or sell view.

In this module you will learn to

  • Value a share with the constant-growth and two-stage dividend discount models
  • Estimate a cost of equity for an Ethiopian bank from T-bill yields and a risk premium
  • Value a bank on price-to-book and price-to-earnings multiples and a justified P/B
  • Calculate the theoretical ex-rights price, the value of a right and the effect of a bonus issue
  • Combine equity and bond analysis into a buy, hold or sell recommendation

Built on

  • Erudite Africa training module: Ethiopian Context, topic 2.c Securities, Levels 1 and 2 (October 2026)
  • Capital Market Proclamation No. 1248/2021; Commercial Code Proclamation No. 1243/2021; National Bank of Ethiopia Proclamation No. 1359/2025
  • ECMA Directives No. 980/2024 and 996/2024; Directive No. 1030/2024 and No. 1009/2024 as reported; ESX Rulebook (December 2024)
  • NBE directives as listed in the lessons: SBB/89/2024, SBB/92/2024, SBB/95/2025, SBB/98/2025, SBB/78/2021 (reported), FXD/04/2026
  • NBE Monetary Policy Committee release No. 7 (July 2026); Ministry of Finance Public Sector Debt Statistical Bulletin No. 56

Examples and companies are fictional. Bank practices are shown as typical Ethiopian practice, not as any one bank's policy. Always apply your own institution's approved policy and the current NBE directives.