Valuation of ordinary and preference shares is done using a different valuation model than that used for bonds.

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Ordinary and preference shares are equity instruments, while bonds are debt instruments. Therefore, they have different cash flow streams and risk profiles, and require different valuation models. Bond valuation typically involves calculating the present value of future cash flows using an appropriate discount rate, such as the yield to maturity or a specific market interest rate. In contrast, share valuation involves estimating future dividends or earnings and applying a suitable valuation multiple or dividend discount model.

Valuation of Ordinary and Preference Shares Is Done Using a Different