Question
A stock is selling at Rs 50. An analyst’s
valuation model estimates its intrinsic value to be Rs 45. Based on her estimate, a stock is:Solution
If the calculation of intrinsic value by an analyst shows that it is lesser than market value then it is overpriced. Intrinsic value is calculated as per the fundamentals of a company, if it shows a lesser value and share is trading at a higher value then it is overpriced.
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