Intrinsic Value Calculator

✖Share Price refers to the current market price at which a single share of a company's stock is being traded on a stock exchange.ⓘ Share Price [SP]			+10% -10%
✖Base Value refers to the principal amount or face value of the instrument.ⓘ Base Value [BSV]			+10% -10%

✖Intrinsic Value refers to the fundamental value of an asset, independent of its market price.ⓘ Intrinsic Value [ITV]

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Formula

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Intrinsic Value

Formula

`"ITV" = "SP"-"BSV"`

Example

`"1.6"="1.85"-"0.25"`

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Intrinsic Value Solution

STEP 0: Pre-Calculation Summary

Formula Used

Intrinsic Value = Share Price-Base Value
ITV = SP-BSV
This formula uses 3 Variables

Variables Used

Intrinsic Value - Intrinsic Value refers to the fundamental value of an asset, independent of its market price.
Share Price - Share Price refers to the current market price at which a single share of a company's stock is being traded on a stock exchange.
Base Value - Base Value refers to the principal amount or face value of the instrument.

STEP 1: Convert Input(s) to Base Unit

Share Price: 1.85 --> No Conversion Required
Base Value: 0.25 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

ITV = SP-BSV --> 1.85-0.25

Evaluating ... ...

ITV = 1.6

STEP 3: Convert Result to Output's Unit

1.6 --> No Conversion Required

FINAL ANSWER

1.6 <-- Intrinsic Value

(Calculation completed in 00.004 seconds)

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Created by Aashna

IGNOU (IGNOU), India

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BMS College of Engineering (BMSCE), Bangalore

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< 14 Forex Management Calculators

Black-Scholes-Merton Option Pricing Model for Call Option

Go Theoretical Price of Call Option = Current Stock Price*Normal Distribution*(Cumulative Distribution 1)-(Option Strike Price*exp(-Risk Free Rate*Time to Expiration of Stock))*Normal Distribution*(Cumulative Distribution 2)

Cumulative Distribution One

Go Cumulative Distribution 1 = (ln(Current Stock Price/Option Strike Price)+(Risk Free Rate+Volatile Underlying Stock^2/2)*Time to Expiration of Stock)/(Volatile Underlying Stock*sqrt(Time to Expiration of Stock))

Fama-French Three-Factor Model

Go Excess Return on Asset = Asset Specific Alpha+Beta in Forex*(Return on Market Portfolio-Risk Free Rate)+(Sensitivity of the Asset to SMB*Small Minus Big+Sensitivity of the Asset to HML+Error Term)

Vasicek Interest Rate

Go Derivative of Short Rate = Speed of Mean Reversal*(Long Term Mean-Short Rate)*Derivatives*Time Period+Volatility at Time*Derivatives*Random Market Risk

Black-Scholes-Merton Option Pricing Model for Put Option

Go Theoretical Price of Put Option = Option Strike Price*exp(-Risk Free Rate*Time to Expiration of Stock)*(-Cumulative Distribution 2)-Current Stock Price*(-Cumulative Distribution 1)

Forward Rate

Go Forward Rate = Spot Exchange Rate*ln((Domestic Interest Rate-Foreign Interest Rate)*Time to Maturity)

Cumulative Distribution Two

Go Cumulative Distribution 2 = Cumulative Distribution 1-Volatile Underlying Stock*sqrt(Time to Expiration of Stock)

Position Size in Forex

Go Position Size in Forex = (Account Equity*Risk Percentage in Forex)/(Stop Loss in Pips*Pip Value in Forex)

Profit for Call Buyer

Go Profit for Call Buyer = max(0,Price of Underlying at Expiration-Exercise Price)-Call Premium

Interest Rate Parity

Go Forward Rate Constant = Spot Exchange Rate*((1+Interest Rate of Quote Currency)/(1+Interest Rate of Base Currency))

Gordon Growth Model

Go Current Stock Price = (Dividend Per Share)/(Required Rate of Return-Constant Growth Rate of Dividend)

Payoff for Call Buyer

Go Payoff for Call Buyer = max(0,Price of Underlying at Expiration-Exercise Price)

Purchasing Power Parity Theory using Inflation

Go Exchange Rate Factor = ((1+Inflation in Home Country)/(1+Inflation in Foreign Country))-1

Intrinsic Value

Go Intrinsic Value = Share Price-Base Value

Intrinsic Value Formula

Intrinsic Value = Share Price-Base Value
ITV = SP-BSV

What do you mean by Intrinsic Value ?

Intrinsic Value is a benchmark for investors to assess whether an asset is undervalued, overvalued, or fairly priced relative to its market price. Investors often seek to buy assets trading below their intrinsic value and sell assets trading above it, with the expectation that market prices will eventually converge towards intrinsic value over time. Intrinsic value for stocks is often determined through fundamental analysis, which involves examining factors such as earnings, growth prospects, dividends, industry conditions, and the overall economic environment. Common methods for estimating the intrinsic value of stocks include discounted cash flow (DCF) analysis, relative valuation, and asset-based valuation. For bonds, intrinsic value is typically calculated as the present value of its future cash flows, including coupon payments and the repayment of principal at maturity. This is similar to the DCF method used for stocks.

How to Calculate Intrinsic Value?

Intrinsic Value calculator uses Intrinsic Value = Share Price-Base Value to calculate the Intrinsic Value, Intrinsic Value formula is the actual worth of the asset based on its underlying characteristics, earnings potential, cash flows, and other relevant factors. Intrinsic Value is denoted by ITV symbol.

How to calculate Intrinsic Value using this online calculator? To use this online calculator for Intrinsic Value, enter Share Price (SP) & Base Value (BSV) and hit the calculate button. Here is how the Intrinsic Value calculation can be explained with given input values -> 1.6 = 1.85-0.25.

FAQ

What is Intrinsic Value?

Intrinsic Value formula is the actual worth of the asset based on its underlying characteristics, earnings potential, cash flows, and other relevant factors and is represented as ITV = SP-BSV or Intrinsic Value = Share Price-Base Value. Share Price refers to the current market price at which a single share of a company's stock is being traded on a stock exchange & Base Value refers to the principal amount or face value of the instrument.

How to calculate Intrinsic Value?

Intrinsic Value formula is the actual worth of the asset based on its underlying characteristics, earnings potential, cash flows, and other relevant factors is calculated using Intrinsic Value = Share Price-Base Value. To calculate Intrinsic Value, you need Share Price (SP) & Base Value (BSV). With our tool, you need to enter the respective value for Share Price & Base Value and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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