When applied to a closely held firm, the following is an example of how the multiple-of- earnings method could be used: Shares of common stock ¼ 100,000 2015 net income ¼ $ 100,000 15% capitalization rate assumed ¼ 6.7 price/ earnings multiple ( derived by dividing 1 by 15 and multiplying the result by 100) Price per share ¼ $ 6.70 Value of company ¼ 100,000 $ 6.70 ¼ $ 670,000