Intrinsic value

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Intrinsic value (alternatively known as fundamental value), P^0, is the present value of a firm's expected future free cash flows.


Definitions

According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),

Intrinsic value (fundamental value), P^0. The present value of a firm's expected future free cash flows.

According to Fundamentals of Financial Management by Eugene F. Brigham and Joel F. Houston (15th edition),

Intrinsic value. An estimate of a stock's "true" value based on accurate risk and return data. The intrinsic value can be estimated, but not measured precisely.

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