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What is the intrinsic value of stock? What is the market capitalization rate? How does intrinsic...

  1. What is the intrinsic value of stock? What is the market capitalization rate? How does intrinsic value influence an investor’s expected rate of return?
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Intrinsic value means fundamental and objective value contained in an asset, or financial contract. It is the anticipated value of a stock, currency or financial product calculated through fundamental analysis.

Market capitalization is the total market value of a company's outstanding shares. It is usually referred to as market cap. It is calculated by multiplying the current market price of one share by the total number of a company's outstanding shares.

The investment decision is taken by the investors by comparing the intrinsic value with market price. If the intrinsic value is more than the market price, the investor can buy since it is underpriced and vice versa. If the stock has good intrinsic value, it will ensure fair return to the stocks.

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