Question

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?
Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

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.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
What is the intrinsic value of stock? What is the market capitalization rate? How does intrinsic...
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?
If a security is underpriced (i.e. intrinsic value > market price), then what is the relationship...
If a security is underpriced (i.e. intrinsic value > market price), then what is the relationship between its market capitalization rate (k) and its expected rate of return (EHPR)? Briefly explain your answer. (if you can point out all of the points needed to answer this so I can turn that into 400 words) [For this theoretical sub-question a word limit of 400 word is required.]
what is intrinsic rate of increase and what does the value of r indicates
what is intrinsic rate of increase and what does the value of r indicates
Explain how a firm's Intrinsic Value is calculated relative to a firm's risk and rate of...
Explain how a firm's Intrinsic Value is calculated relative to a firm's risk and rate of return expected by its shareholders.
As the Finance Manager of a firm you are looking at an investment for some of...
As the Finance Manager of a firm you are looking at an investment for some of the firm’s excess capital in the Catskill Fusion Corporation (CFC) which sells for $65.75 per share and pays an annual dividend of $5.75. Dividends are expected to increase at 7.34% annually. The current risk-free rate is 4.19% and the market index is returning 12.17%. The beta of Catskill is 1.92. The questions are as follows: What should the investor’s required rate of return be...
The market capitalization rate on the stock of Aberdeen Wholesale Company is 13%. Its expected ROE...
The market capitalization rate on the stock of Aberdeen Wholesale Company is 13%. Its expected ROE is 15%, and its expected EPS is $6. If the firm's plowback ratio is 70%, its P/E ratio will be _________. Multiple Choice 9.23 12.00 25.73 40.00
Nina, a lead fundamental analyst was trying to calculate the intrinsic value of ABC Co. stock....
Nina, a lead fundamental analyst was trying to calculate the intrinsic value of ABC Co. stock. She had learnt about dividend discount models as an application of time value of money to price equity instruments. She projected the expected dividends which ABC Co. will be paying. ABC Co. is expected to pay a dividend of $5 at the end of second year with an expected dividend payment of zero for first year. The dividend is expected to grow at 5%...
When calculating the intrinsic value of a stock, the growth rate must always be lower than...
When calculating the intrinsic value of a stock, the growth rate must always be lower than the required return. True or False
What is the difference between instrumental value and intrinsic value? How does Malcolm Budd view the...
What is the difference between instrumental value and intrinsic value? How does Malcolm Budd view the value of art? What about Robert Stecker? For both philosophers, indicate whether they think the value of art is instrumental or intrinsic. Then, say at least one reason or argument they make in support of their conclusion.
What is the difference between instrumental value and intrinsic value? How does Malcolm Budd view the...
What is the difference between instrumental value and intrinsic value? How does Malcolm Budd view the value of art? What about Robert Stecker? For both philosophers, indicate whether they think the value of art is instrumental or intrinsic. Then, say at least one reason or argument they make in support of their conclusion.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT