Book Value vs Intrinsic Value

kr.praharsh
Posts: 2
Joined: Mon Jul 22, 2013 4:12 pm

Book Value vs Intrinsic Value

Postby kr.praharsh » Mon Jul 22, 2013 4:16 pm

Hello Everyone.



I am not able to understand that :

What's the Difference Between the BOOK VALUE and the INTRINSIC VALUE of a SECURITY......???



Would Welcome any answer.

User avatar
shreyas
Finance Junkie
Posts: 83
Joined: Thu Jul 19, 2012 6:49 pm

Book Value vs Intrinsic Value

Postby shreyas » Thu Jul 25, 2013 7:01 am

Intrinsic value also known as the fair value of a company is the value a investor will pay based on the complete knowledge of a security characteristics. For example the fair value of equity can be extracted through valuation methods such as Dividend discount model, Free Cash flow model and so on.

Book value of equity is a simple equation of Assets minus outside liabilities of the company. Book value refers to the net assets of the company left for shareholders of the company after paying off all the liabilities.


Return to “CFA Level I”



cron

Disclaimer

Global Association of Risk Professionals, Inc. (GARP®) does not endorse, promote, review or warrant the accuracy of the products or services offered by EduPristine for FRM® related information, nor does it endorse any pass rates claimed by the provider. Further, GARP® is not responsible for any fees or costs paid by the user to EduPristine nor is GARP® responsible for any fees or costs of any person or entity providing any services to EduPristine Study Program. FRM®, GARP® and Global Association of Risk Professionals®, are trademarks owned by the Global Association of Risk Professionals, Inc

CFA Institute does not endorse, promote, or warrant the accuracy or quality of the products or services offered by EduPristine. CFA Institute, CFA®, Claritas® and Chartered Financial Analyst® are trademarks owned by CFA Institute.

Utmost care has been taken to ensure that there is no copyright violation or infringement in any of our content. Still, in case you feel that there is any copyright violation of any kind please send a mail to abuse@edupristine.com and we will rectify it.