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Centrino Capital

Fair Value Definition

Fair value is an estimate of an asset's true worth based on underlying fundamentals rather than its current market price.

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What is Fair Value?

Analysts calculate fair value using methods such as discounted cash flow analysis or comparisons with similar assets.

A market price above fair value may suggest an asset is overvalued, while a price below may suggest undervaluation.

Example of Fair Value

If a stock is estimated to have a fair value of $60 but trades at $50, some investors may view it as undervalued.

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