Understanding Intrinsic Value Estimation

What is the primary goal of fundamental analysis?

• To analyze the stock market fluctuations

• To estimate the intrinsic value of an investment

• To predict future economic conditions

• To determine the market trends

How does the comparison method estimate the value of an asset?

• By calculating the future cash flows

• By comparing it to similar assets with known values

• By assessing the market demand

• By analyzing the asset's historical performance

In the build-up method, what is the first step in valuing a business?

• Comparing it to similar businesses

• Calculating the market share

• Adding up the value of the business's components

• Estimating future earnings

Why might the build-up method be challenging for valuing large corporations?

• Because they are too big and diverse

• Because they operate in multiple countries

• Because they have fluctuating stock prices

• Because they have too many competitors

What does the DCF model primarily focus on when estimating a stock's value?

• The company's market share

• The company's historical performance

• The company's future earnings and associated risks

• The company's current market price