shares
This query is : Resolved
jai singh jamwal
(Querist)
01 September 2010
Kindly comment upon:
intrinsic value and
extrinsic value of shares
intrinsic value and
extrinsic value of shares
02 September 2010
Intrinsic Value Per Share = Net assets available to Shareholders/ No of Shares. Net Assets Available to Share Holder = Total Assets ( Excluding Prliminary Expenses) - External Liabilities. Intrinsic value per share represents the wealth of shareholder on a specific date.
The extrinsic value is based on the assumption that if comparable asset (or property)
has fetched a certain price, then subject asset (or property) will realize a price
something near to it, based on its own characteristics and situations. The theory
behind this approach is that valuation measures of similar companies that have been
sold in arms-length transactions should represent a good proxy for the specific
company being valued.
The extrinsic value is based on the assumption that if comparable asset (or property)
has fetched a certain price, then subject asset (or property) will realize a price
something near to it, based on its own characteristics and situations. The theory
behind this approach is that valuation measures of similar companies that have been
sold in arms-length transactions should represent a good proxy for the specific
company being valued.
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