Valuation

Fair Value

Definition

What is Fair Value?

An estimate of an asset's appropriate value under specified assumptions or accounting standards.

Example in practice

The valuation model produces a fair value of ₦75 per share.

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The price at which an asset could trade in the market at a given time.

An estimate of an asset's underlying economic worth based on expected cash flows, assets, or earning power.

The amount at which an asset or liability appears in financial statements.

Present value of expected cash inflows minus present value of expected cash outflows.

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