Question

A Company's Share are traded in the
stock market at Rs.44. Its intrinsic
value Rs.36 and yield value is Rs.8.
What is the Fair Value of the share?​

Answer 1

Answer:

fair value of shares will be Rs.22.

Answer 2

The the fair value is  22.

Explanation:

• The fair value technique is essentially a selling price agreed upon by both the buyer and seller, allowing them to freely join into a transaction.
• When a subsidiary's financial statements are consolidated with a parent company's financial statements, fair value represents the assets and liabilities of the subsidiary.
• The fair value approach is calculated by multiplying intrinsic value by yield value and dividing by two.
• The fair value is Intrinsic yield + yield value/2
• Therefore the fair value is (36 +8) / 2

                                                   = 22