eerpreting Different Concepts of Value porate setting, the fundamental equation of value is grounded on the ‘hat Alfred Marshall popularized — a company creates value if and @ return on capital invested exceed the cost of acquiring capital. n the point of view of corporate shareholders, relates to the difference cash inflows generated by an investment and the cost associated capital invested which captures both time value of money and risk of a business can be basically linked to three major factors: » Current operations — how is the operating performance of the firm in ent year? e prospects — what is the long-term, strategic direction of the mpany? bedded risk — what are the business risks involved in running the « are solid concepts; however, the quick tumover of technologies. 8 2c globalization make the business environment more dynamic. As a ing value and identifying relevant drivers became more arduous ses by. As firms continue to quickly evolve and adapt to new valuation of current operations becomes more difficult as @ past. Projecting future macroeconomic indicators also is é of constant changes in the economic environment and the ovation of market players. New risks and competition also ich makes determining uncertainties a critical ingredient to on of value may also vary depending on the context and objective n exercise. = lrrinsic value ic value refers to the value of any asset based on the motion that there is a hypothetical complete understanding of its ent characteristics. Intrinsic value is the value that an investor ders, on the basis of an evaluation of available facts, to be the or "real" value that will become the market value when other Ts reach the same conclusion. As obtaining complete ‘mation about the asset is impractical, investors normally estimate sic value based on their view of the real worth of the asset. If the |