Q885
Present value of dividends which is expected to be provided in future is classified as an
A.
intrinsic value of stock
AnswerB.
extrinsic value of stock
C.
intrinsic bonds
D.
extrinsic bonds
Answer: Option A
Solution
Answer: Option A
Solution:
Present value of dividends which is expected to be provided in future is classified as an intrinsic value of stock. The intrinsic value of a stock, on the other hand, attempts to boil out the externals and value a company on its own merits. Internal factors like a firm's products, its management, and the strength of its brands in the marketplace determine intrinsic value. Investors are interested in cash available to stockholders.