The true worth of a stock

Intrinsic value is a company's fair value, its real worth. As a popular practice, it is calculated through 'discounted cash-flow analysis,' which tries to calculate the present value of future cash flows. In simpler terms, it refers to the price you are paying today for the company's future profits, taking into account the risk involved. For instance, a person who is expected to receive Rs 1 lakh in 10 years from now should be equally satisfied if he receives Rs 32,000 today, assuming he expects to earn a return of

This article was originally published on June 23, 2020.