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Article
Influence of Stocks Intrinsic Valuation on Investment Decision Making: A Literature Review
International Journal of Academic Research in Business and Social Sciences
(2022)
Abstract
All over the world, investment decisions are regarded as critical decisions. Investors prior to the investment decision would like to know the possible risk and returns associated with the kind of investment to be undertaken. Investors make an excellent investment decision based on facts and figures. Since an investor cannot just by looking at a stock say whether it is overvalued, undervalued or at a fair value. This study is based on a literature review determining the intrinsic value of a stock using the Discounted Cash Flow model, with a particular emphasis on the Internal Rate of Return (IRR) and Net Present Value (NPV) approaches, and their influence on investment decision-making. This study recommends that for investors to make a profitable investment decision, they must focus on investments with intrinsic value equal or higher than the market price of stocks.
Keywords
- Intrinsic Value,
- Investment Decision Making,
- Discounted Cash Flow,
- Net Present Value,
- Internal Rate of Return
Disciplines
Publication Date
May 7, 2022
DOI
http://dx.doi.org/10.6007/IJARBSS/v12-i5/13341
Citation Information
Maxwell Okpoti Mensah, Williams Kwasi Peprah, Adu Bismark Owusu-Sekyere, Mensah Morris Ayaa, et al.. "Influence of Stocks Intrinsic Valuation on Investment Decision Making: A Literature Review" International Journal of Academic Research in Business and Social Sciences Vol. 12 Iss. 5 (2022) p. 1268 - 1275 ISSN: 2222-6990 Available at: http://works.bepress.com/williamskwasi-peprah/51/