Business / Taxes / Intrinsic Value: A company’s intrinsic value, or underlying value, is used to calculate its projected worth. You determine intrinsic value by subtracting long-term debt from anticipated future assets, including profits, the potential for increased efficiency, and the sale of new stock. Another approach is to calculate intrinsic value by dividing the company’s estimated future earnings by the number of its existing shares. This method weighs the current price of a stock against its future worth. Critics of using intrinsic worth as a way to evaluate potential investments point out that all of the numbers except debt are hypothetical. The term is also used in options trading to indicate the amount by which an option is in-the-money. For example, an equity call option with a strike price of 35 has an intrinsic value of $4 if the market price of the underlying stock is $39. But if the market price drops to $34, the option has no intrinsic value.
Intrinsic Noun Synonyms: inherent, basic, fundamental, essential, proper, elemental, organic, natural, native, inbred, congenital, inherited, hereditary, innate, inborn, immanent, indwelling, underlying, constitutional, real, true, actual, genuine
Business / Finance / Intrinsic Value Of An Option: The amount by which an option is in the money. An option that is not in the money has no intrinsic value. MORE
Business / Agriculture / Value-Added Agriculture: A concept that has gained currency in the small farm policy debate, in response to the concern that the farm value of the consumer food dollar continues to decrease (which, some small farm advocates c MORE