Asked by Renee White on Jun 03, 2024
Verified
The goal of fundamental analysts is to find securities
A) whose intrinsic value exceeds market price.
B) with a positive present value of growth opportunities.
C) with high market capitalization rates.
D) All of the options are correct.
E) None of the options are correct.
Intrinsic Value
Intrinsic value is the perceived or calculated true value of an asset, investment, or company, based on fundamental analysis rather than current market price.
Market Capitalization Rates
Often referred to simply as market cap, it represents the total market value of a company's outstanding shares.
- Comprehend the elements and uses of the Dividend Discount Model (DDM).
- Acquire an understanding of the required rate of return and how it affects the appraisal of stock values.
- Understand the Present Value of Growth Opportunities (PVGO) and its calculation.
Verified Answer
CZ
Chelsea ZaldivarJun 05, 2024
Final Answer :
A
Explanation :
Fundamental analysts aim to find securities whose intrinsic value exceeds their market price, indicating that they are undervalued and potentially a good investment. Options B and C are not directly related to the primary goal of fundamental analysis.
Learning Objectives
- Comprehend the elements and uses of the Dividend Discount Model (DDM).
- Acquire an understanding of the required rate of return and how it affects the appraisal of stock values.
- Understand the Present Value of Growth Opportunities (PVGO) and its calculation.