Intrinsic values
What’s the difference between a stock’s current market price and its
intrinsic value?
Do stocks have a known and “provable” intrinsic value, or might different people reach different conclusions about intrinsic values? Explain.
Should a firm’s managers estimate its intrinsic value or leave this estimation to outside security analysts? Explain.
If an action would maximize either the current market price or the intrinsic value, but not both, which one should stockholders (as a group) want managers to maximize? Explain.
Should its managers help investors improve their estimates of a firm’s intrinsic value? Explain.
