Intrinsic Value Q
Can somebody please list some reasons as to why an asset can trade above its intrinsic value thank you
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the most basic explanation I I can give is that intrinsic value is not the same as market value. intrinsic value is what it is- the true intrinsic value of an asset as determined in many ways, on of which is the future expected cash flows of that asset. the market value is what the collection of investors in the market believe the intrinsic value of an asset is. in the long run, the market value will reflect the intrinsic value but there are always short term differences.
If you want to dig further, I’d do a little research on the efficient market hypothesis to understand this.
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