Question

The value (intrinsic value) of any financial asset is: Group of answer choices the current market price present value of its future cash flows present value of all past cash flows the future value of the assets cash flows the return that you get from holding the asset

Answer 1

Answer:

The value (intrinsic value) of any financial asset is:

present value of its future cash flows

Explanation:

The intrinsic value is not the current market value.  It is the present value of future cash flows.  This means that future cash flows are discounted to their present values.  This value represents the true value of the financial asset.  By calculating the intrinsic value of the financial asset, the analyst takes away the noise generated by market sentiments as conveyed by current market values.