Benjamin Graham's formula

Benjamin Graham's formula, often referred to as the "Graham Number," is a method for estimating a stock's intrinsic value to determine if it is undervalued or overvalued. The formula combines earnings per share (EPS) and book value per share (BVPS) to calculate a maximum price an investor should pay for a stock. Specifically, it is derived from the square root of 22.5 times the EPS multiplied by the BVPS. This approach helps investors identify fundamentally sound investments while minimizing the risk of overpaying in the stock market. It reflects Graham's value investing philosophy.