Intrinsic Value, Investment Decision Making, Discounted Cash Flow, Internal Rate of Return, Net Present Value
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.
International Journal of Academic Research in Business & Social Sciences
School of Business Administration
Mensah, Maxwell Okpoti; Peprah, Williams Kwasi; Qwusu-Selyere, Adu Bismark; Ayaa, Mensah Morris; and Daniel, Bamfo, "Influence of Stocks Intrinsic Valuation on Investment Decision Making: A Literature Review" (2022). Faculty Publications. 4734.
Open access article retrieved September 6, 2023 from https://hrmars.com/papers_submitted/13341/influence-of-stocks-intrinsic-valuation-on-investment-decision-making-a-literature-review.pdf