Why is option B wrong. If shareholder’s equity is not equal to firms valuation then what is firm’s valuation?
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Why is option B wrong. If shareholder’s equity is not equal to firms valuation then what is firm’s valuation?
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intrinsic value of company is the value when we have complete 100% knowledge of the company’s present and future …. for a normal human being it is impossible to get 100% knowledge / information about a company , we can get closer to IV0 by forecasting models and discounting CFs
Shareholder Equity is book value of equity which is never the intrinsic value because BV of equity contains only past info about the company while IV contains past, present , future , business risk , financial risk , etc