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Can you Type answer. The hand writing isn’t readable Why can the market price of a...

Can you Type answer. The hand writing isn’t readable

Why can the market price of a stock differ from its true (intrinsic) value?
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Answer #1

Market Price of a stock is different from its intrinsic value because market price takes into consideration the current price of stock in stock market whereas intrinsic value is focussed on the book value of equity by the number of outstanding shares.

Market price fluctuation is based on demand and supply of shares and the market price react to the information available about the stock whereas intrinsic value of stock is immune to the information available.

Market price can be greater or less than intrinsic value but in practical world are never equal to intrinsic value.

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