What Is Meant by the Term 'Intrinsic Value' for Shares

question 23

Multiple Choice

What is meant by the term 'intrinsic value' for shares?

• A) The discounted value of the owner earnings that can be added to a business
• B) The future value of the owner earnings that can be added to a business during its remaining life
• C) The discounted value of the owner earnings that can be taken out of a business during its remaining life
• D) The future value of the owner earnings that can be taken out of a business during its remaining life

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Definitions:

Debt Securities

Financial instruments representing a loan made by an investor to a borrower, typically corporate or governmental.

Stock Securities

Shares that represent ownership or equity in a corporation, providing voting rights and a portion of dividends.

Face Value

Amount of principal due at the maturity date of the bond.

Interest Receivable

An asset account on the balance sheet representing interest income that has been earned but not yet collected in cash.