Relevant information about stock market price if it is given, then this price is called______________?
Correct answer: B. Intrinsic price
- A. Market price
- B. Intrinsic price
- C. Extrinsic price
- D. Unstable price
Explanation
Intrinsic price or value is estimated from relevant information about a stock’s expected earnings, risk and cash flows, while market price is the price currently quoted in the marketplace. The question is using “intrinsic price” in this information-based valuation sense.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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