What is meant by the term 'intrinsic value' for shares?
A) The discounted value of the owner earnings that can be added to a business
B) The future value of the owner earnings that can be added to a business during its remaining life
C) The discounted value of the owner earnings that can be taken out of a business during its remaining life
D) The future value of the owner earnings that can be taken out of a business during its remaining life

Question

Quizplus · Accepted Answer

Intrinsic value refers to the present value of all future earnings that can be extracted from a business throughout its remaining life, discounted back to their value in today's dollars. This concept is fundamental in investment analysis, aiming to determine the true value of an asset based on its ability to generate cash flow in the future.

What Is Meant by the Term 'Intrinsic Value' for Shares